FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23266 / May 20, 2015
Securities and Exchange Commission v. China Valves Technology, Inc., et al., Civil Action No. 1:14-cv-01630 (U.S. District Court for the District of Columbia)
SEC Obtains Final Judgments Against China Valves Technology, Inc. and Two Senior Officers in Fraud Case
The Securities and Exchange Commission ("Commission") announced today that on May 13, 2015, the Honorable Reggie B. Walton of the United States District Court for the District of Columbia entered final judgments by consent against defendants China Valves Technology, Inc. ("China Valves"), its Chairman and former CEO, Siping Fang ("Fang"), and its CFO, Renrui Tang ("Tang"). The final judgments: (i) permanently enjoin the defendants from future violations of the anti-fraud, reporting, recordkeeping, and internal controls provisions of the federal securities laws; (ii) order China Valves, Fang, and Tang to pay civil penalties of $575,000, $75,000, and $40,000, respectively; (iii) bar Fang from serving as an officer and director for five years; and (iv) bar Tang from serving as an officer and director for three years. The Commission today also issued an order pursuant to Rule 102(e)(3)(i) denying Tang the privilege of appearing or practicing as an accountant before the Commission with the right to apply for reinstatement after three years.
The case is the latest from the SEC's Cross-Border Working Group that focuses on companies with substantial foreign operations that are publicly traded in the U.S. China Valves was a China-based U.S. issuer formed through a reverse merger in 2007. On March 4, 2015, the Commission issued an order revoking the registration of China Valves securities pursuant to Section 12(j) of the Exchange Act.
The Commission's complaint, filed on September 29, 2014, alleged that China Valves, Fang, Tang, and Jianbao Wang ("Wang"), China Valves's former CEO, intentionally misled investors about the nature of China Valves's 2010 acquisition of Watts Valve Changsha Co., Ltd. ("Changsha Valve") in an effort to mask the subsidiary's prior investigation of violations of the Foreign Corrupt Practices Act ("FCPA") and China Valves's decision to pay sales commissions to employees that potentially violated the FCPA. The complaint further alleged that, in 2011, China Valves materially overstated income and understated liabilities incurred by a wholly-owned subsidiary, Shanghai Pudong Hanwei Valve Co., Ltd ("Hanwei Valve"), when it mischaracterized certain value added tax payments in an attempt to hide the purchase of a valve that it intended to reverse engineer.
The Commission's complaint alleged that China Valves, Fang, Wang, and Tang violated the antifraud provisions of the securities laws, Section 10(b) of the Exchange Act of 1934 (Exchange Act) and Rule 10b-5. The complaint further alleged that China Valves violated reporting, recordkeeping, and internal controls provisions of the federal securities laws, Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13. Finally, the complaint alleged that Fang, Wang, and Tang falsely certified that China Valves's filings contained no material misstatements in violation of Exchange Act Rule 13a-14, and aided and abetted China Valves's violations of the reporting and books and records provisions.
China Valves, Fang, and Tang settled the Commission's charges without admitting or denying the charges in the complaint. The litigation is continuing against Wang.
The SEC's continuing investigation has been conducted by Patrick Feeney, Sarah Nilson, Kelly Dragelin, and Janet Yang, and supervised by Melissa Hodgman. Alfred Day leads the litigation team.
Sunday, May 24, 2015
CDC SAYS SIGNIFICANT CORRELATION FOUND BETWEEN SEVERE VISION LOSS AND POVERTY
FROM: CENTERS FOR DISEASE CONTROL AND PREVENTION
Geographic Disparity of Severe Vision Loss in the United States, 2009–2013
An analysis of U.S. county-level data found a significant correlation between severe vision loss and poverty. Southern states had the highest prevalence of severe vision loss and poverty. Severe vision loss (SVL) often affects activities of daily living, leads to depression and social isolation, and increases the risk of falls and injuries. Limited data and research are available at the local levels, where interventions and policy decisions to reduce the burden of vision loss and eliminate disparities are often developed and implemented. After examining county-level data from the American Community Survey, SVL prevalence was strongly correlated with poverty. The majority of counties in the top 25 percent for both SVL and poverty were primarily in the southern United States.
Geographic Disparity of Severe Vision Loss in the United States, 2009–2013
An analysis of U.S. county-level data found a significant correlation between severe vision loss and poverty. Southern states had the highest prevalence of severe vision loss and poverty. Severe vision loss (SVL) often affects activities of daily living, leads to depression and social isolation, and increases the risk of falls and injuries. Limited data and research are available at the local levels, where interventions and policy decisions to reduce the burden of vision loss and eliminate disparities are often developed and implemented. After examining county-level data from the American Community Survey, SVL prevalence was strongly correlated with poverty. The majority of counties in the top 25 percent for both SVL and poverty were primarily in the southern United States.
MANUFACTURER OF WET WIPES SETTLES FLUSHABLE ISSUE WITH FTC
FROM: U.S. FEDERAL TRADE COMMISSION
Wet Wipe Manufacturer Agrees To Substantiate “Flushability” Advertising Claims under Settlement with FTC
Nice-Pak Products Were also Sold under Costco, CVS, and Target’s Private Labels
Under a settlement with the Federal Trade Commission, Nice-Pak Products, Inc., a manufacturer of wet wipes, has agreed to stop advertising moist toilet tissue as flushable unless it can substantiate that the product is safe to flush. Similarly, Nice-Pak agreed to not claim that its moist toilet tissue is safe for sewer and septic tanks unless it has substantiation for those claims.
In addition, Nice-Pak will stop providing trade customers, such as retailers, with information to make such unsubstantiated claims. Costco, CVS, Target, and BJ’s Wholesale Club were Nice-Pak customers that sold the formulation of the company’s moist toilet tissue that was the subject of the complaint under their own private labels.
Nice-Pak logo, 'breaks apart after flushing'“The evidence didn’t back up Nice-Pak’s claims that their wipes were safe to flush,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If you claim a product is flushable, it needs to flush in the real world, without clogging household plumbing or sewer and septic systems.”
According to the FTC’s complaint, Nice-Pak violated the FTC Act by misrepresenting that a certain formulation of its wipes: 1) are safe for sewer systems; 2) are safe for septic systems; 3) break apart shortly after being flushed; and 4) are safe to flush. The FTC also alleges Nice-Pak provided the means and instrumentalities for retailers and others that marketed the product under their own label to make similar misrepresentations. The company’s tests did not reflect, real world household plumbing or septic conditions, the FTC alleged.
The proposed administrative consent order settling the FTC charges prohibits Nice-Pak from misrepresenting that any wipe is safe to flush, unless it can substantiate that the wipe will disperse in a “sufficiently short amount of time” after flushing to prevent clogging and/or damage to household plumbing, sewage lines, septic systems, and other standard wastewater treatment equipment. The test must also replicate the physical conditions of the environment where the wipes will be disposed.
In addition, the proposed order prohibits Nice-Pak from making representations about the benefits, performance, or efficacy of moist toilet tissue, unless the statements are not misleading and the company relies on competent and reliable evidence, which in some instances must be competent and reliable scientific evidence, to support the claims made. The proposed order also prohibits Nice-Pak from providing the means and instrumentalities to anyone else to make the prohibited misrepresentations.
The Commission vote issuing the complaint and approving the proposed consent order was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through June 19, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be submitted electronically.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
Wet Wipe Manufacturer Agrees To Substantiate “Flushability” Advertising Claims under Settlement with FTC
Nice-Pak Products Were also Sold under Costco, CVS, and Target’s Private Labels
Under a settlement with the Federal Trade Commission, Nice-Pak Products, Inc., a manufacturer of wet wipes, has agreed to stop advertising moist toilet tissue as flushable unless it can substantiate that the product is safe to flush. Similarly, Nice-Pak agreed to not claim that its moist toilet tissue is safe for sewer and septic tanks unless it has substantiation for those claims.
In addition, Nice-Pak will stop providing trade customers, such as retailers, with information to make such unsubstantiated claims. Costco, CVS, Target, and BJ’s Wholesale Club were Nice-Pak customers that sold the formulation of the company’s moist toilet tissue that was the subject of the complaint under their own private labels.
Nice-Pak logo, 'breaks apart after flushing'“The evidence didn’t back up Nice-Pak’s claims that their wipes were safe to flush,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If you claim a product is flushable, it needs to flush in the real world, without clogging household plumbing or sewer and septic systems.”
According to the FTC’s complaint, Nice-Pak violated the FTC Act by misrepresenting that a certain formulation of its wipes: 1) are safe for sewer systems; 2) are safe for septic systems; 3) break apart shortly after being flushed; and 4) are safe to flush. The FTC also alleges Nice-Pak provided the means and instrumentalities for retailers and others that marketed the product under their own label to make similar misrepresentations. The company’s tests did not reflect, real world household plumbing or septic conditions, the FTC alleged.
The proposed administrative consent order settling the FTC charges prohibits Nice-Pak from misrepresenting that any wipe is safe to flush, unless it can substantiate that the wipe will disperse in a “sufficiently short amount of time” after flushing to prevent clogging and/or damage to household plumbing, sewage lines, septic systems, and other standard wastewater treatment equipment. The test must also replicate the physical conditions of the environment where the wipes will be disposed.
In addition, the proposed order prohibits Nice-Pak from making representations about the benefits, performance, or efficacy of moist toilet tissue, unless the statements are not misleading and the company relies on competent and reliable evidence, which in some instances must be competent and reliable scientific evidence, to support the claims made. The proposed order also prohibits Nice-Pak from providing the means and instrumentalities to anyone else to make the prohibited misrepresentations.
The Commission vote issuing the complaint and approving the proposed consent order was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through June 19, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be submitted electronically.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
FEDERAL FUNDING FOR RESEARCH AND DEVELOPMENT FELL IN FY 2013
FROM: NATIONAL SCIENCE FOUNDATION
Latest figures show decline in federal funding for R&D, equipment, facilities in FY 2013
Projections show rising federal agency obligations in FY 2014 and FY 2015
Federal agency funding for research and development and R&D plant (facilities and fixed equipment used for R&D) fell by 9 percent in fiscal year 2013, according to a new InfoBrief from the National Center for Science and Engineering Statistics (NCSES).
NCSES found that total federal agency obligations dropped from $141 billion to $127 billion between fiscal 2012 and fiscal 2013. Funding dropped by 4 percent for research, 14 percent for development and 11 percent for R&D plant, according to the NCSES report.
The fiscal 2013 figures represent the most recent actual data available. Estimates project that combined funding for R&D and R&D plant will rise by 3 percent ($4 billion) in fiscal 2014 and 2 percent ($3 billion) in fiscal 2015.
Changes in agency obligation levels between fiscal 2012 and fiscal 2013 include the following:
14 percent drop ($10 billion) at the Department of Defense, which accounted for just over half of all federal R&D obligations in fiscal 2013
6 percent drop ($2 billion) at the Department of Health and Human Services, which accounted for 23 percent of federal R&D obligations
3 percent drop at NASA, which accounted for 8 percent of federal R&D obligations
1 percent drop at the Department of Energy, which accounted for 8 percent of federal R&D obligations
4 percent drop at the National Science Foundation (NSF), which accounted for 4 percent of federal R&D obligations
NCSES found that federal obligations for basic research declined by 4 percent. Basic research obligations are estimated to increase by 6 percent in fiscal 2014, then decrease by less than 1 percent in fiscal 2015.
Latest figures show decline in federal funding for R&D, equipment, facilities in FY 2013
Projections show rising federal agency obligations in FY 2014 and FY 2015
Federal agency funding for research and development and R&D plant (facilities and fixed equipment used for R&D) fell by 9 percent in fiscal year 2013, according to a new InfoBrief from the National Center for Science and Engineering Statistics (NCSES).
NCSES found that total federal agency obligations dropped from $141 billion to $127 billion between fiscal 2012 and fiscal 2013. Funding dropped by 4 percent for research, 14 percent for development and 11 percent for R&D plant, according to the NCSES report.
The fiscal 2013 figures represent the most recent actual data available. Estimates project that combined funding for R&D and R&D plant will rise by 3 percent ($4 billion) in fiscal 2014 and 2 percent ($3 billion) in fiscal 2015.
Changes in agency obligation levels between fiscal 2012 and fiscal 2013 include the following:
14 percent drop ($10 billion) at the Department of Defense, which accounted for just over half of all federal R&D obligations in fiscal 2013
6 percent drop ($2 billion) at the Department of Health and Human Services, which accounted for 23 percent of federal R&D obligations
3 percent drop at NASA, which accounted for 8 percent of federal R&D obligations
1 percent drop at the Department of Energy, which accounted for 8 percent of federal R&D obligations
4 percent drop at the National Science Foundation (NSF), which accounted for 4 percent of federal R&D obligations
NCSES found that federal obligations for basic research declined by 4 percent. Basic research obligations are estimated to increase by 6 percent in fiscal 2014, then decrease by less than 1 percent in fiscal 2015.
REAL ESTATE INVESTOR PLEADS GUILTY TO BID RIGGING, FRAUD CONSPIRACIES AT FORECLOSURE AUCTIONS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, May 19, 2015
Georgia Real Estate Investor Pleads Guilty to Bid Rigging and Fraud Conspiracies at Public Foreclosure Auctions
A Georgia real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.
Felony charges against Eric Hulsman were filed on March 27, 2015, in the U.S. District Court of the Northern District of Georgia in Atlanta. According to court documents, from at least as early March 6, 2007, and continuing at least until Dec. 6, 2011, in Fulton County, Georgia, and from at least as early as Jan. 2, 2007, and continuing at least until Jan. 1, 2008, in DeKalb County, Georgia, Hulsman conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions. Hulsman was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.
“Homeowners and lenders in Fulton and DeKalb counties deserved free and fair public real estate foreclosure auctions,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The defendant conspired with others to keep for themselves money that should have gone to those homeowners and lenders. The division remains committed to rooting out this kind of anticompetitive conduct at foreclosure auctions.”
The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Fulton and DeKalb county public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and in some cases, the defaulting homeowner.
“Today’s guilty plea of another real estate investor engaged in unfair bidding practices is further evidence of the FBI’s support for the U.S. Department of Justice’s Antitrust Division in ensuring that public foreclosure auctions remain a level playing field for all,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office. “Anyone with information regarding such criminal activities as seen in this case should promptly call their nearest FBI field office.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
Including Hulsman, eight cases have been filed as a result of the ongoing investigation being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, and the U.S. Attorney’s Office of the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.
AG LYNCH VISITS CINCINNATI, OHIO
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, May 19, 2015
Readout of Attorney General Lynch's Visit to Cincinnati, Ohio
Attorney General Loretta E. Lynch traveled to Cincinnati, Ohio, for the first stop in her national Community Policing Tour to highlight collaborative programs and policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust and respect. The Attorney General also announced that she will visit Birmingham, Alabama; Pittsburgh, Pennsylvania; East Haven, Connecticut; Seattle, Washington; and Richmond, California.
The Attorney General was joined by U.S. Attorney Carter M. Stewart for the Southern District of Ohio, Director Ron Davis for the Community Oriented Policing Services (COPS) Office, Mayor John Cranley for the city Cincinnati, and Cincinnati Police Chief Jeffrey Blackwell.
While in Cincinnati, the Attorney General met with youth and law enforcement at Chase Elementary School to witness firsthand the city’s Right to Read Program in which Cincinnati police officers work with University of Cincinnati students to mentor and tutor children. At Chase Elementary, the Attorney General played “Jeopardy” with the elementary school students. She, the Attorney General, was gratified to hear how the young students described police as peace keepers and protectors of the community. In her remarks to the students and local officers, the Attorney General said, “It’s tremendous what you’ve been doing,” to show how integral law enforcement can be in the lives of our communities. She also described the innovative approach in Cincinnati as a model for other departments to follow.
After visiting the school, the Attorney General spoke briefly to reporters and took a few questions about her interactions with the children and the importance of community policing.
“What I saw were children being engaged, children learning, children finding that learning can be fun, children learning about senses – about the world around them – at an age where, I think educators will tell you, it is really crucial that we not lose our children and they not fall out of the educational system and that they develop that love for learning,” Attorney General Lynch told reporters. “But I also saw children who were aware of the larger community around them and had a very good sense of what law enforcement does – law enforcement at its best because they are seeing law enforcement at best. So in their interactions in the future they will have that context into which to put them as well as law enforcement will have those interactions into which to put them.”
The Attorney General also visited the Cincinnati Police Department for a meet and greet with police officers. She commended the department’s efforts to reach out to the community, saying, “It's very easy for the cameras to show up when something's on fire, but we also want them to see the work that you're doing day in and day out.” She also thanked the officers on behalf of the Justice Department for the “hard work” they do every day and spoke to officers that were hired with COPS Office hiring grants. The Justice Department through its COPS Office yesterday announced five separate grant funding opportunities of up to $163 million for law enforcement agencies to help implement the recommendations made by the President’s Task Force on 21st Century Policing.
Following her meeting with police officers, the Attorney General ate lunch with U.S. Attorney Stewart, COPS Director Davis, and Cincinnati Police Chief Blackwell at local restaurant Skyline Chili.
Following a tour led by the curator of the National Underground Railroad Freedom Center, the Attorney General convened a meeting with city officials, law enforcement, local and faith leaders, young people and other members of the community to discuss ways in which the success Cincinnati has seen in building trust between law enforcement and the community can be replicated in cities across the nation.
“Every city deserves an outstanding, world-class police force that works alongside local residents to protect public safety,” said Attorney General Lynch. “And every officer deserves the tools, training, and support they need to do their jobs as safely and effectively as possible.” Her full remarks can be found here.
The Attorney General also visited with Department of Justice employees at the office of the U.S. Attorney for the Southern District of Ohio. Following that meeting, the Attorney General met with the family of John Crawford III, a 22-year African-American man, was shot and killed by a Beavercreek, Ohio police officer inside a Wal-Mart store while Crawford held a BB gun.
Tuesday, May 19, 2015
Readout of Attorney General Lynch's Visit to Cincinnati, Ohio
Attorney General Loretta E. Lynch traveled to Cincinnati, Ohio, for the first stop in her national Community Policing Tour to highlight collaborative programs and policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust and respect. The Attorney General also announced that she will visit Birmingham, Alabama; Pittsburgh, Pennsylvania; East Haven, Connecticut; Seattle, Washington; and Richmond, California.
The Attorney General was joined by U.S. Attorney Carter M. Stewart for the Southern District of Ohio, Director Ron Davis for the Community Oriented Policing Services (COPS) Office, Mayor John Cranley for the city Cincinnati, and Cincinnati Police Chief Jeffrey Blackwell.
While in Cincinnati, the Attorney General met with youth and law enforcement at Chase Elementary School to witness firsthand the city’s Right to Read Program in which Cincinnati police officers work with University of Cincinnati students to mentor and tutor children. At Chase Elementary, the Attorney General played “Jeopardy” with the elementary school students. She, the Attorney General, was gratified to hear how the young students described police as peace keepers and protectors of the community. In her remarks to the students and local officers, the Attorney General said, “It’s tremendous what you’ve been doing,” to show how integral law enforcement can be in the lives of our communities. She also described the innovative approach in Cincinnati as a model for other departments to follow.
After visiting the school, the Attorney General spoke briefly to reporters and took a few questions about her interactions with the children and the importance of community policing.
“What I saw were children being engaged, children learning, children finding that learning can be fun, children learning about senses – about the world around them – at an age where, I think educators will tell you, it is really crucial that we not lose our children and they not fall out of the educational system and that they develop that love for learning,” Attorney General Lynch told reporters. “But I also saw children who were aware of the larger community around them and had a very good sense of what law enforcement does – law enforcement at its best because they are seeing law enforcement at best. So in their interactions in the future they will have that context into which to put them as well as law enforcement will have those interactions into which to put them.”
The Attorney General also visited the Cincinnati Police Department for a meet and greet with police officers. She commended the department’s efforts to reach out to the community, saying, “It's very easy for the cameras to show up when something's on fire, but we also want them to see the work that you're doing day in and day out.” She also thanked the officers on behalf of the Justice Department for the “hard work” they do every day and spoke to officers that were hired with COPS Office hiring grants. The Justice Department through its COPS Office yesterday announced five separate grant funding opportunities of up to $163 million for law enforcement agencies to help implement the recommendations made by the President’s Task Force on 21st Century Policing.
Following her meeting with police officers, the Attorney General ate lunch with U.S. Attorney Stewart, COPS Director Davis, and Cincinnati Police Chief Blackwell at local restaurant Skyline Chili.
Following a tour led by the curator of the National Underground Railroad Freedom Center, the Attorney General convened a meeting with city officials, law enforcement, local and faith leaders, young people and other members of the community to discuss ways in which the success Cincinnati has seen in building trust between law enforcement and the community can be replicated in cities across the nation.
“Every city deserves an outstanding, world-class police force that works alongside local residents to protect public safety,” said Attorney General Lynch. “And every officer deserves the tools, training, and support they need to do their jobs as safely and effectively as possible.” Her full remarks can be found here.
The Attorney General also visited with Department of Justice employees at the office of the U.S. Attorney for the Southern District of Ohio. Following that meeting, the Attorney General met with the family of John Crawford III, a 22-year African-American man, was shot and killed by a Beavercreek, Ohio police officer inside a Wal-Mart store while Crawford held a BB gun.
REPORT SHOWS WHO EARNS A DOCTORATE IN THE U.S.
FROM: NATIONAL SCIENCE FOUNDATION
Who earns a doctorate? More women, more foreigners, more minorities
The number of research doctorate degrees awarded by U.S. institutions in 2013 grew by 3.5 percent over the previous year, a single-year increase that has only been exceeded twice in the past two decades, according to a new report from the National Science Foundation's (NSF) National Center for Science and Engineering Statistics (NCSES).
The report, Doctorate Recipients from U.S. Universities: 2013, presents data on degree recipients--broken down by categories including citizenship, sex, race and ethnicity, and field of study. NCSES provides detailed data tables and interactive charts for readers to explore online.
The report addresses six key questions: Who earns a U.S doctorate? Which fields attract students? What influences the path to the doctorate? What are the postgraduation trends? What draws students to an institution? And how do expenses and employment outcomes differ? Understanding those characteristics is necessary to make informed improvements in the country's doctoral education system.
The report's findings include the following:
Women earned 46 percent of all doctorates in 2013, and they have earned a majority of all doctorates awarded to U.S. citizens and permanent residents since 2002.
The proportion of doctorates awarded to black or African American students rose from 4.5 percent in 1993 to 6.4 percent in 2013; over the same period, doctorates awarded to Hispanics or Latinos rose from 3.4 percent to 6.3 percent.
Ten countries accounted for 70 percent of the doctorates awarded to temporary visa holders from 2003 to 2013 and the top three--China, India and South Korea--accounted for more than half.
The science and engineering fields accounted for 74 percent of the doctorates awarded in 2013, a substantially larger share than the 65 percent from 10 years earlier.
In every broad science and engineering field, the proportion of 2013 doctorate recipients who reported definite commitments for employment or postdoctorate study was at or near a 25-year-low; for non-S&E fields, that proportion reached a 20-year low.
The report is the latest presentation of an annual census of individuals who in 2013 received research doctorate degrees. The survey is sponsored by NSF, the National Aeronautics and Space Administration, the National Endowment for the Humanities, the National Institutes of Health, the Department of Agriculture and the Department of Education.
Please visit the NSF's National Center for Science and Engineering Statistics (NCSES) for more reports and other products.
-NSF-
Media Contacts
Rob Margetta, NSF
Program Contacts
Mark K. Fiegener, NSF
The National Science Foundation (NSF) is an independent federal agency that supports fundamental research and education across all fields of science and engineering. In fiscal year (FY) 2015, its budget is $7.3 billion. NSF funds reach all 50 states through grants to nearly 2,000 colleges, universities and other institutions. Each year, NSF receives about 48,000 competitive proposals for funding, and makes about 11,000 new funding awards. NSF also awards about $626 million in professional and service contracts yearly.
Who earns a doctorate? More women, more foreigners, more minorities
The number of research doctorate degrees awarded by U.S. institutions in 2013 grew by 3.5 percent over the previous year, a single-year increase that has only been exceeded twice in the past two decades, according to a new report from the National Science Foundation's (NSF) National Center for Science and Engineering Statistics (NCSES).
The report, Doctorate Recipients from U.S. Universities: 2013, presents data on degree recipients--broken down by categories including citizenship, sex, race and ethnicity, and field of study. NCSES provides detailed data tables and interactive charts for readers to explore online.
The report addresses six key questions: Who earns a U.S doctorate? Which fields attract students? What influences the path to the doctorate? What are the postgraduation trends? What draws students to an institution? And how do expenses and employment outcomes differ? Understanding those characteristics is necessary to make informed improvements in the country's doctoral education system.
The report's findings include the following:
Women earned 46 percent of all doctorates in 2013, and they have earned a majority of all doctorates awarded to U.S. citizens and permanent residents since 2002.
The proportion of doctorates awarded to black or African American students rose from 4.5 percent in 1993 to 6.4 percent in 2013; over the same period, doctorates awarded to Hispanics or Latinos rose from 3.4 percent to 6.3 percent.
Ten countries accounted for 70 percent of the doctorates awarded to temporary visa holders from 2003 to 2013 and the top three--China, India and South Korea--accounted for more than half.
The science and engineering fields accounted for 74 percent of the doctorates awarded in 2013, a substantially larger share than the 65 percent from 10 years earlier.
In every broad science and engineering field, the proportion of 2013 doctorate recipients who reported definite commitments for employment or postdoctorate study was at or near a 25-year-low; for non-S&E fields, that proportion reached a 20-year low.
The report is the latest presentation of an annual census of individuals who in 2013 received research doctorate degrees. The survey is sponsored by NSF, the National Aeronautics and Space Administration, the National Endowment for the Humanities, the National Institutes of Health, the Department of Agriculture and the Department of Education.
Please visit the NSF's National Center for Science and Engineering Statistics (NCSES) for more reports and other products.
-NSF-
Media Contacts
Rob Margetta, NSF
Program Contacts
Mark K. Fiegener, NSF
The National Science Foundation (NSF) is an independent federal agency that supports fundamental research and education across all fields of science and engineering. In fiscal year (FY) 2015, its budget is $7.3 billion. NSF funds reach all 50 states through grants to nearly 2,000 colleges, universities and other institutions. Each year, NSF receives about 48,000 competitive proposals for funding, and makes about 11,000 new funding awards. NSF also awards about $626 million in professional and service contracts yearly.
SECRETARY KERRY'S REMARKS ON AN OPEN AND SECURE INTERNET
FROM: U.S. STATE DEPARTMENT
An Open and Secure Internet: We Must Have Both
Remarks
John Kerry
Secretary of State
Korea University
Seoul, South Korea
May 18, 2015
SECRETARY KERRY: (Applause.) Well, good afternoon, President Yeom. Thank you very much for a generous introduction. Distinguished guests, all, I’m delighted to be here and I want to thank the university, and particularly Park No-young, the Director of the Cyber Law Center, for inviting me to be here today. Thank you very, very much.
I also want to acknowledge somewhere – I don’t see him – but my friend, the ambassador from the United States of America – there he is right in front of me – Mark Lippert, who represents the United States here in Seoul. And he’s a special person. I’ve known him for a long time. He served in the United States Navy. He served in Afghanistan and served for the President, been an advisor to several presidents. But recently, as you all know, he displayed great grace and dignity under duress, and like all of our diplomats, whose jobs carry with them certain risks on the front lines of diplomacy, I will tell you that Mark has never wavered from his determination to do his job and to represent our country to the best of his ability – which, believe me, he does. So I’m grateful for his leadership. And, Mark, thank you for the great example you’re setting.
I’m really happy to be back here in Seoul. This is a beautiful city, and I’m struck every time I come here. I wish I had more time. Time is the enemy of those of us in diplomacy nowadays. But the United States and South Korea share a very special history, obviously, and we also share great hopes for the future. And I am very happy to be here to talk about our shared interests, though it will not just be, President Yeom, about the security; it will be about the internet itself, which is important as we think about security. It’s also, obviously, very critical as we think about the many interests that we share together, ranging from security on the Korean Peninsula, to the success of the Korea-U.S. Free Trade Agreement, to the many connections that exist between the Korean and the American peoples – including, I want you to know, a love for Psy, K-Pop, bibimbap, and Pororo, the little penguin. (Laughter.) I want you to know that my staff recommended that I walk out here this afternoon, dancing to Gangnam Style – but I told them no, that’s too 2012.
Today, it’s really more than appropriate to be here in the most wired city in the country, one of the most wired cities in the world, in order to speak with you about digital technology and about the fears and the possibilities that we associate with digital technology. And let me underscore: It’s the possibilities that should motivate us, and it’s the possibilities that bring me here today.
Now, years ago, South Korea made a conscious choice to become a global IT leader and you have delivered. As a society, you opened the door to investment, you encouraged households to sign up for broadband, you eased the transition to new technology, and you developed programs in universities just like this one to educate young people in digital skills. And I applaud you for the remarkable linkage to the military and the security side of it with the offer that you make to students who will come here, learn, and then go on to serve the country in the military for those seven years.
Today, thanks in part to President Park’s commitment to build a, quote, “creative economy,” the ROK is a virtual synonym for Internet success stories, such as the educational network service ClassTing; or the Kakao, your messenger app which is one of the fastest-growing tech firms in all of Asia; and GRobotics, a company which has revolutionized the robot industry and, incredibly, it was originally conceived by an amazing 11-year-old child. Just two weeks ago, Ambassador Lippert joined President Park at the opening of the Google Campus for startups and entrepreneurs right here in Seoul – an initiative designed to spur the exchange of ideas and digital growth in both of our countries. Now, both of our nations know and view the internet and cyber issues as part of a new frontier for our governments and peoples, and it will be one of the key areas discussed when our two presidents meet in in Washington in June.
The fact is, whichever side of the Pacific Ocean we live on, the internet today is part of almost everything that we do. And just to tell you how amazing it is, I served in the United States Senate on the Commerce Committee in 1996. I was chairman of the Communications Subcommittee when we rewrote the communications law for our country. And guess what? Barely anybody in 1996 was talking about data, and data transformation, and data management. It was all about telephony – the telephone. That’s how far we’ve traveled in 20 years.
So it matters to all of us how the technology is used and how it’s governed. That is precisely why the United States considers the promotion of an open and secure internet to be a key component of our foreign policy. It’s why we want to work with you and with international partners everywhere in order to better understand the choices that we face in managing this extraordinary resource – a resource which does present us with certain challenges even as it presents us with unprecedented opportunities.
Now, what do I mean by that?
Well, to begin with, America believes – as I know you do – that the internet should be open and accessible to everyone. We believe it should be interoperable, so it can connect seamlessly across international borders. We believe people are entitled to the same rights of free expression online as they possess offline. We believe countries should work together to deter and respond effectively to online threats. And we believe digital policy should seek to fulfill the technology’s potential as a vehicle for global stability and sustained economic development; as an innovative way to enhance the transparency of governments and hold governments accountable; and also as a means for social empowerment that is also the most democratic form of public expression ever invented.
At its best, the internet is an equal-opportunity platform from which the voice of a student can have as much reach as that of a billionaire; a chief executive may be able to be out-debated by an entry-level employee – and there’s nothing wrong with that. Most users of the internet agree, on the internet as in any other venue, the human rights of every person – including freedom of expression – should be protected and respected. The United Nations has repeatedly affirmed this view, but as we know, it is still not universally held. That means that we will continue to have important choices to make – important choices to make locally, to make in universities, to make in businesses, to make in countries, and between countries. We will have a lot of choices about technology among and between nations.
Let me tell you something: How we choose begins with what we believe. And what we believe about the internet hinges to a great extent on how we feel, each and every one of us, about freedom.
Freedom. The United States believes strongly in freedom – in freedom of expression, freedom of association, freedom of choice. But particularly, this is important with respect to freedom of expression, and you believe in that freedom of expression here in Korea. We want that right for ourselves and we want that right for others even if we don’t agree always with the views that others express. We understand that freedom of expression is not a license to incite imminent violence. It’s not a license to commit fraud. It’s not a license to indulge in libel, or sexually exploit children. No. But we do know that some governments will use any excuse that they can find to silence their critics and that those governments have responded to the rise of the internet by stepping up their own efforts to control what people read, see, write, and say.
This is truly a point of separation in our era – now, in the 21st century. It’s a point of separation between governments that want the internet to serve their citizens and those who seek to use or restrict access to the internet in order to control their citizens.
Here in the Asia Pacific, we see countries such as the ROK and Japan that are among the world’s leaders in internet access, while North Korea is at the exact opposite end of that spectrum, with the lowest rate of access in the world and the most rigid and centralized control.
No other government is as extreme as the DPRK, but there are more than a few who want to harvest the economic benefits of the internet while nevertheless closing off the avenues of political, social, and religious expression. They impose filters that eliminate broad categories of what their citizens can see and receive and transmit – and with whom ideas may be changed and shared. What’s more, the governments that have pioneered the repressive use of such technologies are quick to export their tools and methods to others, and thereby further diminish individual rights. At the same time, some governments are using the internet to track down activists and journalists who write something that they don’t like, and even reach beyond their borders in order to intimidate their critics.
My friends, this discourages free expression and it clearly seems intended to turn their part of the internet into a graveyard for new ideas – the exact opposite of what it should be, a fertile field where such ideas can blossom and grow.
Let’s be clear: Every government has a responsibility to provide security for its citizens. Yes. We all agree with that. In the United States, our efforts to do so – and the reforms that we have undertaken in the process – have been guided by our concern for individual rights and our commitment to oversight and review. Further, unlike many, we have taken steps to respect and safeguard the privacy of the citizens of other countries and to use the information that we do collect solely to address the very specific threat to the United States and to our allies. We don’t use security concerns as an excuse to suppress criticisms of our policies or to give a competitive advantage to an American company and any commercial interests at all.
Now, regrettably, it is no coincidence that many of the governments that have a poor record on internet freedom also have a questionable commitment to human rights more generally. United States policy has always been to engage with such governments to encourage reforms and to point out the contributions to prosperity that would flow from a more open approach. Regimes that practice repression typically argue that they have no obligation to justify what they do inside their own borders, but that assertion is directly contradicted by the Universal Declaration of Human Rights and by many other multilateral declarations and statements.
The fact is, an individual’s aspiration to be free may be the most single powerful force on Earth. It’s an aspiration that may be able to be slowed sometimes, maybe intimidated sometimes, it may even be eliminated temporarily by violence in certain cases. But I’m telling you its power within the human soul is so infectious that it will always resurface in one form or another, even in the most extraordinary circumstances.
And history – history has proven that again and again and again. Throughout history, we have seen that men and women will do whatever it takes to find a way to make their desire for freedom known. We saw that with the authors of the pamphlets that helped to spark the revolution that gave birth to my home country in the 1700s. We saw it with the dissidents writing newsletters and producing radio broadcasts behind the Iron Curtain during the Cold War. And we see it today, in places all over the world, where young people are challenging injustice – armed only with their smart phones.
The internet is, among many other things, an instrument of freedom. It’s a tool people resort to in response to the absence and failure or abuse of government. So of course, some leaders are afraid of it. They’re afraid of the internet in the same way that their predecessors were afraid of newspapers, books, and the radio, but even more so because in this case, because of the interactivity that allows for a free-flowing discussion and the exchange of views – activities that can, and often do, lead to change.
I say to you today, here at Korea University, that fear is misplaced, and that response is, in the end, futile. Anyone who blames the internet for the disorder or turmoil in today’s world is just not using their head to connect the dots correctly. And banning the internet in a misguided attempt to impose order will never succeed in quashing the universal desire for freedom.
Ladies and gentlemen, repression does not eliminate the speech we hate. It just forces it into other avenues – avenues that often can become more dangerous than the speech itself that people are fighting. The remedy for the speech that we do not like is more speech. It’s the credible voices of real people that must not only be enabled, but they need to be amplified.
The good news is that much of the world understands this. More and more of the world understands this. And the advocates of internet freedom and openness are speaking up. The United States is part of the Freedom Online Coalition, a 26-country group that we are actively seeking to expand. The coalition argues that narrow and distorted visions of the internet cannot be allowed to prevail. Freedom must win out over censorship. That is an important principle, but it is also a practical imperative. After all, from the dawn of history to the present day, repression hasn’t invented a thing. Freedom is how jobs are created, diseases are cured, alternative energy is harnessed, and new ways are found to feed a global population that has quadrupled in the past century and that will rise to some 9 billion people in the next 40 to 50 years. Without freedom, civilization can’t advance; it’s like a bicycle without pedals.
Remember that the internet is not just another sector of our economy. Like electricity, it is a general purpose technology that is used in thousands of different ways, streamlining everything from buying a cup of coffee to building a skyscraper. Consider what would happen if someone tried to block the flow of electricity – the lights would go out and everything would stop. In fact, when I was a lot younger, Hollywood made a movie about exactly that; it was called “The Day the Earth Stood Still.” And thank heavens they made a couple more of them so you can’t tell exactly which one I’m referring to. (Laughter.) Now, you might want to watch it, because policies that restrict online data streams have a similar effect, if perhaps not quite so dramatic.
Think, for example, of what would take place if every country imposed data localization requirements, causing information to halt and to undergo inspection whenever it reached a national border. Imagine what would happen to commerce and to the flow of information, to the simple effort to get an answer to a question at a dinner table when you’re talking with people and you want to Google something. The delays would create huge obstacles to multinational business at a time when speed is of the essence and cross-border enterprises are major engines of growth. That’s not a formula for progress; it’s a way to stop progress in its tracks.
The internet provides broadly-shared connections that are essential for modern economies to be able to grow. It’s that simple. It can help people even in remote areas take advantage of government services and make a better business decision, for example. Let me give you an example. It could make a difference to people about when you bring your crops to the market or how do you find international customers for local projects.
With digital technology, fishermen in Mozambique can keep their catch fresh in the water until they have a buyer, somewhere in another continent maybe, thus eliminating spoilage and waste.
Shopkeepers in sub-Saharan Africa have seen their incomes actually grow by using mobile banking technology to avoid local loan sharks and go directly to reputable financial institutions for emergency credit and loans.
The system becomes more accountable and more transparent and more accessible. Women entrepreneurs in Southeast Asia have formed cooperatives online that enable them to take advantage of economies of scale.
Children from Angola to India are learning more and faster through education that comes to them over the internet.
And a couple of years ago, a young engineer from Cameroon developed a computer tablet called “Cardiopad” that enables Africans to be able to have a heart examination at home and receive the diagnosis from doctors who may be hundreds of miles away. Think about that.
The examples are endless, but you get the point. I know. The internet fuels innovation that can lead to improved efficiency, improved productivity in every sector of a developing economy.
But in thinking about the internet’s promise, you have to recognize how far that potential is from being fulfilled today. Roughly three out of every five people in the world today remain without internet access – and in the poorest countries that figure can top 95 percent.
A big part of the reason is simply cost. Ask yourself: How much of your family’s income do you pay for internet access? In America, the average is 1 or 2 percent. But a typical family in some countries have to pay 10 percent for entry-level mobile broadband and roughly four times that for fixed broadband. In other words, people with low incomes can’t afford digital access. They need to earn more money. To break that circle of despair, we need to bring the costs down by getting public policies right – because money isn’t the only barrier.
There’s a reason why access is relatively high in Colombia but low in Venezuela. There’s a reason why it’s high in Malaysia but low in Cambodia; a reason why it’s high in Rwanda but low in Ethiopia. Some governments do much more than others to facilitate access for people in poor or remote areas. And the starting point is for every country to have a clear and comprehensive national broadband plan that allows for private investment, encourages competition, removes bureaucratic obstacles, and takes full advantage of shared internet services at schools, libraries, community centers, and cafes.
That’s why two years ago the United States helped create the Alliance for Affordable Internet. This broad coalition draws on expertise from governments, the private sector, and civil society to assist policy makers in expanding access while keeping prices low. It’s the right goal, and I’ll tell you, it’s also a smart goal. According to one recent European study, tripling mobile broadband penetration levels across the developing world would provide a return of as much as $17 for every $1 spent.
About 10 days ago, when I was in Kenya, I Skyped, using the internet, with a group of young Somali refugees. Most of these refugees were high school or college age kids, and yet – and yet, extraordinarily, many of them had never, ever been outside that refugee camp – ever. This, in an era of incredible globalization – they had only lived in one refugee camp. The students I spoke to wanted desperately to be able to complete their schooling. They wanted to find a job. They wanted to go on to university. They wanted to begin a career. One young woman, who is studying chemistry and biology, told me she hoped to become a doctor. Now, I’m willing to bet you that she’s never been inside a hospital. But that’s what she wanted to do – become a doctor. The irony is that, at the refugee camp, they have internet connections. Now, I can’t help but wonder whether that will be the case when they return to Somalia.
If there is any message that is going to be sent to governments by young people in the world today, it is the desire – the universal desire – for jobs, for opportunity, for education, for a future. That’s what people want. It’s what every family in the world really wants. No one is asking to be censored. No one is yearning to be told what to think and how to live. The same desires that helped South Korea embrace democracy are what sparked the beginnings of the Arab Spring; they’re what kept the pro-democracy movement alive through two decades of dictatorship in Burma; and they’re what prompted the voters of Sri Lanka and Nigeria to flock to the polls in recent months and cast their ballots for change.
So looking to the future, we have to respond to this demand for openness and opportunity by making steady progress toward closing the digital divide. And with that goal in mind, the United States State Department will soon launch a new diplomatic initiative – in combination with partner countries, development banks, engineers, and industry leaders – and we’re going to do just that: try to make it more available. You may be sure that we will be inviting your government and other representatives from this highly-connected country to help us lead and guide this effort. Because this will define the future. And this is the way we’ll address violent extremism, and failing states.
So this brings me to another issue that should concern us all, and that is governance – because even a technology founded on freedom needs rules to be able to flourish and work properly. We understand that. Unlike many models of government that are basically top-down, the internet allows all stakeholders – the private sector, civil society, academics, engineers, and governments – to all have seats at the table. And this multi-stakeholder approach is embodied in a myriad of institutions that each day address internet issues and help digital technology to be able to function.
The versatility of the current approach enables it to move both with deliberation and care on complex issues and, frankly, much more rapidly on situations that demand a rapid response. For example, we saw the community respond to the 2007 cyberattacks in Estonia in a matter of hours. And as recently as last week, it responded literally in minutes to an unexpected outage of the Amsterdam exchange, which is the second-largest internet exchange point in the world.
That’s why we have to be wary of those who claim that the system is broken or who advocate replacing it with a more centralized arrangement – where governments would have a monopoly on the decision-making. That’s dangerous. Now, I don’t know what you think, but I am confident that if we were to ask any large group of internet users anywhere in the world what their preferences are, the option “leave everything to the government” would be at the absolute bottom of the list. Because of the dynamic nature of this technology, new issues are constantly on the horizon – but the multi-stakeholder approach remains the fairest and the best, most effective way to be able to resolve those challenges.
Now, as everyone knows, it’s impossible to talk about cyber policy without talking about international peace and security. You live this truth right here in South Korea, just as we do in the United States. Both of our countries have been hit by serious cyber-attacks from state and non-state actors. Worldwide, the risk and frequency of such attacks is on the increase.
America’s policy is to promote international cyber stability. The goal is to create a climate in which all states are able to enjoy the benefits of cyberspace; all have incentives to cooperate and avoid conflict; and all have good reason not to disrupt or attack one another. To achieve this, we are seeking a broad consensus on where to draw the line between responsible and irresponsible behavior.
As I’ve mentioned, the basic rules of international law apply in cyberspace. Acts of aggression are not permissible. And countries that are hurt by an attack have a right to respond in ways that are appropriate, proportional, and that minimize harm to innocent parties. We also support a set of additional principles that, if observed, can contribute substantially to conflict prevention and stability in time of peace. We view these as universal concepts that should be appealing to all responsible states, and they are already gaining traction.
First, no country should conduct or knowingly support online activity that intentionally damages or impedes the use of another country’s critical infrastructure. Second, no country should seek either to prevent emergency teams from responding to a cybersecurity incident, or allow its own teams to cause harm. Third, no country should conduct or support cyber-enabled theft of intellectual property, trade secrets, or other confidential business information for commercial gain. Fourth, every country should mitigate malicious cyber activity emanating from its soil, and they should do so in a transparent, accountable and cooperative way. And fifth, every country should do what it can to help states that are victimized by a cyberattack.
I guarantee you if those five principles were genuinely and fully adopted and implemented by countries, we would be living in a far safer and far more confident cyberworld.
But even with these principles, ensuring international cyber stability will remain a work in progress. We still have a lot of work to do to develop a truly reliable framework – based on international law – that will effectively deter violations and minimize the danger of conflict.
To build trust, the UN Group of Governmental Experts has stressed the importance of high-level communication, transparency about national policies, dispute settlement mechanisms, and the timely sharing of information – all of them, very sound and important thoughts. The bottom line is that we who seek stability and peace in cyberspace should be clear about what we expect and intend, and those who may be tempted to cause trouble should be forewarned: they will be held accountable for their actions. The United States reserves the right to use all necessary means, including economic, trade and diplomatic tools, as appropriate in order to defend our nation and our partners, our friends, our allies. The sanctions against North Korean officials earlier this year are one example of the use of such a tool in response to DPRK's provocative, destabilizing and repressive actions, including the cyber-attack on Sony Pictures. Now, as the international community moves towards consensus about what exactly constitutes unacceptable behavior in cyberspace, more and more responsible nations need to join together to act against disruptors and rogue actors.
As we know, malicious governments are only part of the cybersecurity problem. Organized crime is active in cyberspace. So are individual con artists, unscrupulous hackers, and persons engaged in fraud. Unfortunately, the relative anonymity of the internet makes it an ideal vehicle for criminal activity – but not an excuse for working through the principles I described to finding rules of the road and working so that the internet works for everybody else. The resulting financial cost of those bad actors, the cost of cybercrime, is already enormous, but so is the loss of trust in the internet that every successful fraud or theft engenders.
And that’s precisely why the United States is working with partners on every continent to strengthen the capacity of governments to prevent cyber-crime through improved training, the right legal frameworks, information sharing, and public involvement.
The best vehicle for international cooperation in this field is the Budapest Convention on Cybercrime, which my government urges every nation to consider joining. There is no better legal framework for working across borders to define what cybercrime is and how breaches of the law should be prevented and prosecuted. We also support the G-7 24/7 Network – in which South Korea is an active participant – and that enables police and prosecutors from more than 70 countries to request rapid assistance on their investigations.
The United States is also working with partners to improve network defenses and in cooperation with other countries to respond to cyber incidents. All of this is crucial, because in an interconnected system like the internet, poor cybersecurity has the potential to increase the danger for all of us. So we have to help each other. We have to maintain direct contact between our incident response teams, invest heavily in that capacity, and build that capacity so that weak spots are turned into stronger blockages against the vulnerabilities, and ultimately, they disappear.
So to sum up, I think it is clear to all of us that the internet is not like most inventions that affect a single industry, require just a few tweaks – a little adjustment here and there – and then we can all move on. That’s not what it requires. Digital technology has led us into a whole new frontier in which we have to find our way – and there are many different dimensions to it. When I was still in the United States Senate, I introduced legislation to protect the privacy rights of individuals and I still feel very strongly about that principle. And we are working to make sure we protect the privacy of people, not just in our country but in others.
As Secretary of State, I am in charge of an organization that is the target of hacking attempts every single day – and we have to defend against those. As a diplomat, I’m constantly engaged in discussions with counterparts about how to best enhance access and how to design and enforce the right rules to protect all of us.
My meetings with the private sector, the scientific community, the civil society, all bring home to me how important it is that all stakeholders have a voice in internet governance. The very essence of this technology is its freedom and its openness, and unless we bring all the stakeholders to the table, that will be lost. And something more important than all of us will be lost with it.
We cannot let that happen. Now, as I said before, obviously, the internet is not without risk – but at the end of the day, if we restricted all technology that could possibly be used for bad purposes, we’d have to revert to the Stone Age. Throughout the global community, we need to come together around principles that will establish a solid foundation for our freedoms – principles that will protect the rights of individuals, the privacy of our citizenry, and the security of our nations – all at the same time.
So I leave you with a somewhat unusual request: Keep doing what so many of you are already doing. Speak up for an open and secure internet. Defend freedom of expression. Add to South Korea’s great reputation as a leader in digital technology. In doing so, we can be absolutely confident about the future that we will shape.
And how will we know when we finally have succeeded? When an open, secure internet is as widespread as electricity or cellphone coverage itself. When it is fully integrated into everyday life in every corner of the globe. When it is no longer contested but accepted and even taken for granted. When we reach that point – believe me: Your successors will look back at all of this debate and they will wonder how could anyone have argued the other way.
My friends, if we do all of these things, if we stick by our guns, the internet revolution that we are living today will literally define the kinds of opportunities that young people all over the world are hoping for today – help strengthen governments; provide opportunity; make us safer; bring us together; and in effect, define the future of this century. That’s the goal we’re fighting for, and we look forward to working with all of you to achieve it.
Thank you.
An Open and Secure Internet: We Must Have Both
Remarks
John Kerry
Secretary of State
Korea University
Seoul, South Korea
May 18, 2015
SECRETARY KERRY: (Applause.) Well, good afternoon, President Yeom. Thank you very much for a generous introduction. Distinguished guests, all, I’m delighted to be here and I want to thank the university, and particularly Park No-young, the Director of the Cyber Law Center, for inviting me to be here today. Thank you very, very much.
I also want to acknowledge somewhere – I don’t see him – but my friend, the ambassador from the United States of America – there he is right in front of me – Mark Lippert, who represents the United States here in Seoul. And he’s a special person. I’ve known him for a long time. He served in the United States Navy. He served in Afghanistan and served for the President, been an advisor to several presidents. But recently, as you all know, he displayed great grace and dignity under duress, and like all of our diplomats, whose jobs carry with them certain risks on the front lines of diplomacy, I will tell you that Mark has never wavered from his determination to do his job and to represent our country to the best of his ability – which, believe me, he does. So I’m grateful for his leadership. And, Mark, thank you for the great example you’re setting.
I’m really happy to be back here in Seoul. This is a beautiful city, and I’m struck every time I come here. I wish I had more time. Time is the enemy of those of us in diplomacy nowadays. But the United States and South Korea share a very special history, obviously, and we also share great hopes for the future. And I am very happy to be here to talk about our shared interests, though it will not just be, President Yeom, about the security; it will be about the internet itself, which is important as we think about security. It’s also, obviously, very critical as we think about the many interests that we share together, ranging from security on the Korean Peninsula, to the success of the Korea-U.S. Free Trade Agreement, to the many connections that exist between the Korean and the American peoples – including, I want you to know, a love for Psy, K-Pop, bibimbap, and Pororo, the little penguin. (Laughter.) I want you to know that my staff recommended that I walk out here this afternoon, dancing to Gangnam Style – but I told them no, that’s too 2012.
Today, it’s really more than appropriate to be here in the most wired city in the country, one of the most wired cities in the world, in order to speak with you about digital technology and about the fears and the possibilities that we associate with digital technology. And let me underscore: It’s the possibilities that should motivate us, and it’s the possibilities that bring me here today.
Now, years ago, South Korea made a conscious choice to become a global IT leader and you have delivered. As a society, you opened the door to investment, you encouraged households to sign up for broadband, you eased the transition to new technology, and you developed programs in universities just like this one to educate young people in digital skills. And I applaud you for the remarkable linkage to the military and the security side of it with the offer that you make to students who will come here, learn, and then go on to serve the country in the military for those seven years.
Today, thanks in part to President Park’s commitment to build a, quote, “creative economy,” the ROK is a virtual synonym for Internet success stories, such as the educational network service ClassTing; or the Kakao, your messenger app which is one of the fastest-growing tech firms in all of Asia; and GRobotics, a company which has revolutionized the robot industry and, incredibly, it was originally conceived by an amazing 11-year-old child. Just two weeks ago, Ambassador Lippert joined President Park at the opening of the Google Campus for startups and entrepreneurs right here in Seoul – an initiative designed to spur the exchange of ideas and digital growth in both of our countries. Now, both of our nations know and view the internet and cyber issues as part of a new frontier for our governments and peoples, and it will be one of the key areas discussed when our two presidents meet in in Washington in June.
The fact is, whichever side of the Pacific Ocean we live on, the internet today is part of almost everything that we do. And just to tell you how amazing it is, I served in the United States Senate on the Commerce Committee in 1996. I was chairman of the Communications Subcommittee when we rewrote the communications law for our country. And guess what? Barely anybody in 1996 was talking about data, and data transformation, and data management. It was all about telephony – the telephone. That’s how far we’ve traveled in 20 years.
So it matters to all of us how the technology is used and how it’s governed. That is precisely why the United States considers the promotion of an open and secure internet to be a key component of our foreign policy. It’s why we want to work with you and with international partners everywhere in order to better understand the choices that we face in managing this extraordinary resource – a resource which does present us with certain challenges even as it presents us with unprecedented opportunities.
Now, what do I mean by that?
Well, to begin with, America believes – as I know you do – that the internet should be open and accessible to everyone. We believe it should be interoperable, so it can connect seamlessly across international borders. We believe people are entitled to the same rights of free expression online as they possess offline. We believe countries should work together to deter and respond effectively to online threats. And we believe digital policy should seek to fulfill the technology’s potential as a vehicle for global stability and sustained economic development; as an innovative way to enhance the transparency of governments and hold governments accountable; and also as a means for social empowerment that is also the most democratic form of public expression ever invented.
At its best, the internet is an equal-opportunity platform from which the voice of a student can have as much reach as that of a billionaire; a chief executive may be able to be out-debated by an entry-level employee – and there’s nothing wrong with that. Most users of the internet agree, on the internet as in any other venue, the human rights of every person – including freedom of expression – should be protected and respected. The United Nations has repeatedly affirmed this view, but as we know, it is still not universally held. That means that we will continue to have important choices to make – important choices to make locally, to make in universities, to make in businesses, to make in countries, and between countries. We will have a lot of choices about technology among and between nations.
Let me tell you something: How we choose begins with what we believe. And what we believe about the internet hinges to a great extent on how we feel, each and every one of us, about freedom.
Freedom. The United States believes strongly in freedom – in freedom of expression, freedom of association, freedom of choice. But particularly, this is important with respect to freedom of expression, and you believe in that freedom of expression here in Korea. We want that right for ourselves and we want that right for others even if we don’t agree always with the views that others express. We understand that freedom of expression is not a license to incite imminent violence. It’s not a license to commit fraud. It’s not a license to indulge in libel, or sexually exploit children. No. But we do know that some governments will use any excuse that they can find to silence their critics and that those governments have responded to the rise of the internet by stepping up their own efforts to control what people read, see, write, and say.
This is truly a point of separation in our era – now, in the 21st century. It’s a point of separation between governments that want the internet to serve their citizens and those who seek to use or restrict access to the internet in order to control their citizens.
Here in the Asia Pacific, we see countries such as the ROK and Japan that are among the world’s leaders in internet access, while North Korea is at the exact opposite end of that spectrum, with the lowest rate of access in the world and the most rigid and centralized control.
No other government is as extreme as the DPRK, but there are more than a few who want to harvest the economic benefits of the internet while nevertheless closing off the avenues of political, social, and religious expression. They impose filters that eliminate broad categories of what their citizens can see and receive and transmit – and with whom ideas may be changed and shared. What’s more, the governments that have pioneered the repressive use of such technologies are quick to export their tools and methods to others, and thereby further diminish individual rights. At the same time, some governments are using the internet to track down activists and journalists who write something that they don’t like, and even reach beyond their borders in order to intimidate their critics.
My friends, this discourages free expression and it clearly seems intended to turn their part of the internet into a graveyard for new ideas – the exact opposite of what it should be, a fertile field where such ideas can blossom and grow.
Let’s be clear: Every government has a responsibility to provide security for its citizens. Yes. We all agree with that. In the United States, our efforts to do so – and the reforms that we have undertaken in the process – have been guided by our concern for individual rights and our commitment to oversight and review. Further, unlike many, we have taken steps to respect and safeguard the privacy of the citizens of other countries and to use the information that we do collect solely to address the very specific threat to the United States and to our allies. We don’t use security concerns as an excuse to suppress criticisms of our policies or to give a competitive advantage to an American company and any commercial interests at all.
Now, regrettably, it is no coincidence that many of the governments that have a poor record on internet freedom also have a questionable commitment to human rights more generally. United States policy has always been to engage with such governments to encourage reforms and to point out the contributions to prosperity that would flow from a more open approach. Regimes that practice repression typically argue that they have no obligation to justify what they do inside their own borders, but that assertion is directly contradicted by the Universal Declaration of Human Rights and by many other multilateral declarations and statements.
The fact is, an individual’s aspiration to be free may be the most single powerful force on Earth. It’s an aspiration that may be able to be slowed sometimes, maybe intimidated sometimes, it may even be eliminated temporarily by violence in certain cases. But I’m telling you its power within the human soul is so infectious that it will always resurface in one form or another, even in the most extraordinary circumstances.
And history – history has proven that again and again and again. Throughout history, we have seen that men and women will do whatever it takes to find a way to make their desire for freedom known. We saw that with the authors of the pamphlets that helped to spark the revolution that gave birth to my home country in the 1700s. We saw it with the dissidents writing newsletters and producing radio broadcasts behind the Iron Curtain during the Cold War. And we see it today, in places all over the world, where young people are challenging injustice – armed only with their smart phones.
The internet is, among many other things, an instrument of freedom. It’s a tool people resort to in response to the absence and failure or abuse of government. So of course, some leaders are afraid of it. They’re afraid of the internet in the same way that their predecessors were afraid of newspapers, books, and the radio, but even more so because in this case, because of the interactivity that allows for a free-flowing discussion and the exchange of views – activities that can, and often do, lead to change.
I say to you today, here at Korea University, that fear is misplaced, and that response is, in the end, futile. Anyone who blames the internet for the disorder or turmoil in today’s world is just not using their head to connect the dots correctly. And banning the internet in a misguided attempt to impose order will never succeed in quashing the universal desire for freedom.
Ladies and gentlemen, repression does not eliminate the speech we hate. It just forces it into other avenues – avenues that often can become more dangerous than the speech itself that people are fighting. The remedy for the speech that we do not like is more speech. It’s the credible voices of real people that must not only be enabled, but they need to be amplified.
The good news is that much of the world understands this. More and more of the world understands this. And the advocates of internet freedom and openness are speaking up. The United States is part of the Freedom Online Coalition, a 26-country group that we are actively seeking to expand. The coalition argues that narrow and distorted visions of the internet cannot be allowed to prevail. Freedom must win out over censorship. That is an important principle, but it is also a practical imperative. After all, from the dawn of history to the present day, repression hasn’t invented a thing. Freedom is how jobs are created, diseases are cured, alternative energy is harnessed, and new ways are found to feed a global population that has quadrupled in the past century and that will rise to some 9 billion people in the next 40 to 50 years. Without freedom, civilization can’t advance; it’s like a bicycle without pedals.
Remember that the internet is not just another sector of our economy. Like electricity, it is a general purpose technology that is used in thousands of different ways, streamlining everything from buying a cup of coffee to building a skyscraper. Consider what would happen if someone tried to block the flow of electricity – the lights would go out and everything would stop. In fact, when I was a lot younger, Hollywood made a movie about exactly that; it was called “The Day the Earth Stood Still.” And thank heavens they made a couple more of them so you can’t tell exactly which one I’m referring to. (Laughter.) Now, you might want to watch it, because policies that restrict online data streams have a similar effect, if perhaps not quite so dramatic.
Think, for example, of what would take place if every country imposed data localization requirements, causing information to halt and to undergo inspection whenever it reached a national border. Imagine what would happen to commerce and to the flow of information, to the simple effort to get an answer to a question at a dinner table when you’re talking with people and you want to Google something. The delays would create huge obstacles to multinational business at a time when speed is of the essence and cross-border enterprises are major engines of growth. That’s not a formula for progress; it’s a way to stop progress in its tracks.
The internet provides broadly-shared connections that are essential for modern economies to be able to grow. It’s that simple. It can help people even in remote areas take advantage of government services and make a better business decision, for example. Let me give you an example. It could make a difference to people about when you bring your crops to the market or how do you find international customers for local projects.
With digital technology, fishermen in Mozambique can keep their catch fresh in the water until they have a buyer, somewhere in another continent maybe, thus eliminating spoilage and waste.
Shopkeepers in sub-Saharan Africa have seen their incomes actually grow by using mobile banking technology to avoid local loan sharks and go directly to reputable financial institutions for emergency credit and loans.
The system becomes more accountable and more transparent and more accessible. Women entrepreneurs in Southeast Asia have formed cooperatives online that enable them to take advantage of economies of scale.
Children from Angola to India are learning more and faster through education that comes to them over the internet.
And a couple of years ago, a young engineer from Cameroon developed a computer tablet called “Cardiopad” that enables Africans to be able to have a heart examination at home and receive the diagnosis from doctors who may be hundreds of miles away. Think about that.
The examples are endless, but you get the point. I know. The internet fuels innovation that can lead to improved efficiency, improved productivity in every sector of a developing economy.
But in thinking about the internet’s promise, you have to recognize how far that potential is from being fulfilled today. Roughly three out of every five people in the world today remain without internet access – and in the poorest countries that figure can top 95 percent.
A big part of the reason is simply cost. Ask yourself: How much of your family’s income do you pay for internet access? In America, the average is 1 or 2 percent. But a typical family in some countries have to pay 10 percent for entry-level mobile broadband and roughly four times that for fixed broadband. In other words, people with low incomes can’t afford digital access. They need to earn more money. To break that circle of despair, we need to bring the costs down by getting public policies right – because money isn’t the only barrier.
There’s a reason why access is relatively high in Colombia but low in Venezuela. There’s a reason why it’s high in Malaysia but low in Cambodia; a reason why it’s high in Rwanda but low in Ethiopia. Some governments do much more than others to facilitate access for people in poor or remote areas. And the starting point is for every country to have a clear and comprehensive national broadband plan that allows for private investment, encourages competition, removes bureaucratic obstacles, and takes full advantage of shared internet services at schools, libraries, community centers, and cafes.
That’s why two years ago the United States helped create the Alliance for Affordable Internet. This broad coalition draws on expertise from governments, the private sector, and civil society to assist policy makers in expanding access while keeping prices low. It’s the right goal, and I’ll tell you, it’s also a smart goal. According to one recent European study, tripling mobile broadband penetration levels across the developing world would provide a return of as much as $17 for every $1 spent.
About 10 days ago, when I was in Kenya, I Skyped, using the internet, with a group of young Somali refugees. Most of these refugees were high school or college age kids, and yet – and yet, extraordinarily, many of them had never, ever been outside that refugee camp – ever. This, in an era of incredible globalization – they had only lived in one refugee camp. The students I spoke to wanted desperately to be able to complete their schooling. They wanted to find a job. They wanted to go on to university. They wanted to begin a career. One young woman, who is studying chemistry and biology, told me she hoped to become a doctor. Now, I’m willing to bet you that she’s never been inside a hospital. But that’s what she wanted to do – become a doctor. The irony is that, at the refugee camp, they have internet connections. Now, I can’t help but wonder whether that will be the case when they return to Somalia.
If there is any message that is going to be sent to governments by young people in the world today, it is the desire – the universal desire – for jobs, for opportunity, for education, for a future. That’s what people want. It’s what every family in the world really wants. No one is asking to be censored. No one is yearning to be told what to think and how to live. The same desires that helped South Korea embrace democracy are what sparked the beginnings of the Arab Spring; they’re what kept the pro-democracy movement alive through two decades of dictatorship in Burma; and they’re what prompted the voters of Sri Lanka and Nigeria to flock to the polls in recent months and cast their ballots for change.
So looking to the future, we have to respond to this demand for openness and opportunity by making steady progress toward closing the digital divide. And with that goal in mind, the United States State Department will soon launch a new diplomatic initiative – in combination with partner countries, development banks, engineers, and industry leaders – and we’re going to do just that: try to make it more available. You may be sure that we will be inviting your government and other representatives from this highly-connected country to help us lead and guide this effort. Because this will define the future. And this is the way we’ll address violent extremism, and failing states.
So this brings me to another issue that should concern us all, and that is governance – because even a technology founded on freedom needs rules to be able to flourish and work properly. We understand that. Unlike many models of government that are basically top-down, the internet allows all stakeholders – the private sector, civil society, academics, engineers, and governments – to all have seats at the table. And this multi-stakeholder approach is embodied in a myriad of institutions that each day address internet issues and help digital technology to be able to function.
The versatility of the current approach enables it to move both with deliberation and care on complex issues and, frankly, much more rapidly on situations that demand a rapid response. For example, we saw the community respond to the 2007 cyberattacks in Estonia in a matter of hours. And as recently as last week, it responded literally in minutes to an unexpected outage of the Amsterdam exchange, which is the second-largest internet exchange point in the world.
That’s why we have to be wary of those who claim that the system is broken or who advocate replacing it with a more centralized arrangement – where governments would have a monopoly on the decision-making. That’s dangerous. Now, I don’t know what you think, but I am confident that if we were to ask any large group of internet users anywhere in the world what their preferences are, the option “leave everything to the government” would be at the absolute bottom of the list. Because of the dynamic nature of this technology, new issues are constantly on the horizon – but the multi-stakeholder approach remains the fairest and the best, most effective way to be able to resolve those challenges.
Now, as everyone knows, it’s impossible to talk about cyber policy without talking about international peace and security. You live this truth right here in South Korea, just as we do in the United States. Both of our countries have been hit by serious cyber-attacks from state and non-state actors. Worldwide, the risk and frequency of such attacks is on the increase.
America’s policy is to promote international cyber stability. The goal is to create a climate in which all states are able to enjoy the benefits of cyberspace; all have incentives to cooperate and avoid conflict; and all have good reason not to disrupt or attack one another. To achieve this, we are seeking a broad consensus on where to draw the line between responsible and irresponsible behavior.
As I’ve mentioned, the basic rules of international law apply in cyberspace. Acts of aggression are not permissible. And countries that are hurt by an attack have a right to respond in ways that are appropriate, proportional, and that minimize harm to innocent parties. We also support a set of additional principles that, if observed, can contribute substantially to conflict prevention and stability in time of peace. We view these as universal concepts that should be appealing to all responsible states, and they are already gaining traction.
First, no country should conduct or knowingly support online activity that intentionally damages or impedes the use of another country’s critical infrastructure. Second, no country should seek either to prevent emergency teams from responding to a cybersecurity incident, or allow its own teams to cause harm. Third, no country should conduct or support cyber-enabled theft of intellectual property, trade secrets, or other confidential business information for commercial gain. Fourth, every country should mitigate malicious cyber activity emanating from its soil, and they should do so in a transparent, accountable and cooperative way. And fifth, every country should do what it can to help states that are victimized by a cyberattack.
I guarantee you if those five principles were genuinely and fully adopted and implemented by countries, we would be living in a far safer and far more confident cyberworld.
But even with these principles, ensuring international cyber stability will remain a work in progress. We still have a lot of work to do to develop a truly reliable framework – based on international law – that will effectively deter violations and minimize the danger of conflict.
To build trust, the UN Group of Governmental Experts has stressed the importance of high-level communication, transparency about national policies, dispute settlement mechanisms, and the timely sharing of information – all of them, very sound and important thoughts. The bottom line is that we who seek stability and peace in cyberspace should be clear about what we expect and intend, and those who may be tempted to cause trouble should be forewarned: they will be held accountable for their actions. The United States reserves the right to use all necessary means, including economic, trade and diplomatic tools, as appropriate in order to defend our nation and our partners, our friends, our allies. The sanctions against North Korean officials earlier this year are one example of the use of such a tool in response to DPRK's provocative, destabilizing and repressive actions, including the cyber-attack on Sony Pictures. Now, as the international community moves towards consensus about what exactly constitutes unacceptable behavior in cyberspace, more and more responsible nations need to join together to act against disruptors and rogue actors.
As we know, malicious governments are only part of the cybersecurity problem. Organized crime is active in cyberspace. So are individual con artists, unscrupulous hackers, and persons engaged in fraud. Unfortunately, the relative anonymity of the internet makes it an ideal vehicle for criminal activity – but not an excuse for working through the principles I described to finding rules of the road and working so that the internet works for everybody else. The resulting financial cost of those bad actors, the cost of cybercrime, is already enormous, but so is the loss of trust in the internet that every successful fraud or theft engenders.
And that’s precisely why the United States is working with partners on every continent to strengthen the capacity of governments to prevent cyber-crime through improved training, the right legal frameworks, information sharing, and public involvement.
The best vehicle for international cooperation in this field is the Budapest Convention on Cybercrime, which my government urges every nation to consider joining. There is no better legal framework for working across borders to define what cybercrime is and how breaches of the law should be prevented and prosecuted. We also support the G-7 24/7 Network – in which South Korea is an active participant – and that enables police and prosecutors from more than 70 countries to request rapid assistance on their investigations.
The United States is also working with partners to improve network defenses and in cooperation with other countries to respond to cyber incidents. All of this is crucial, because in an interconnected system like the internet, poor cybersecurity has the potential to increase the danger for all of us. So we have to help each other. We have to maintain direct contact between our incident response teams, invest heavily in that capacity, and build that capacity so that weak spots are turned into stronger blockages against the vulnerabilities, and ultimately, they disappear.
So to sum up, I think it is clear to all of us that the internet is not like most inventions that affect a single industry, require just a few tweaks – a little adjustment here and there – and then we can all move on. That’s not what it requires. Digital technology has led us into a whole new frontier in which we have to find our way – and there are many different dimensions to it. When I was still in the United States Senate, I introduced legislation to protect the privacy rights of individuals and I still feel very strongly about that principle. And we are working to make sure we protect the privacy of people, not just in our country but in others.
As Secretary of State, I am in charge of an organization that is the target of hacking attempts every single day – and we have to defend against those. As a diplomat, I’m constantly engaged in discussions with counterparts about how to best enhance access and how to design and enforce the right rules to protect all of us.
My meetings with the private sector, the scientific community, the civil society, all bring home to me how important it is that all stakeholders have a voice in internet governance. The very essence of this technology is its freedom and its openness, and unless we bring all the stakeholders to the table, that will be lost. And something more important than all of us will be lost with it.
We cannot let that happen. Now, as I said before, obviously, the internet is not without risk – but at the end of the day, if we restricted all technology that could possibly be used for bad purposes, we’d have to revert to the Stone Age. Throughout the global community, we need to come together around principles that will establish a solid foundation for our freedoms – principles that will protect the rights of individuals, the privacy of our citizenry, and the security of our nations – all at the same time.
So I leave you with a somewhat unusual request: Keep doing what so many of you are already doing. Speak up for an open and secure internet. Defend freedom of expression. Add to South Korea’s great reputation as a leader in digital technology. In doing so, we can be absolutely confident about the future that we will shape.
And how will we know when we finally have succeeded? When an open, secure internet is as widespread as electricity or cellphone coverage itself. When it is fully integrated into everyday life in every corner of the globe. When it is no longer contested but accepted and even taken for granted. When we reach that point – believe me: Your successors will look back at all of this debate and they will wonder how could anyone have argued the other way.
My friends, if we do all of these things, if we stick by our guns, the internet revolution that we are living today will literally define the kinds of opportunities that young people all over the world are hoping for today – help strengthen governments; provide opportunity; make us safer; bring us together; and in effect, define the future of this century. That’s the goal we’re fighting for, and we look forward to working with all of you to achieve it.
Thank you.
Saturday, May 23, 2015
FTC SAYS CONSUMERS LOST MONEY IN INTERNATIONAL SWEEPSTAKES SCAM
FROM: U.S. FEDERAL TRADE COMMISSION
Consumers Lost Millions of Dollars Despite ‘Guarantee’ of Prize Money
At the request of the Federal Trade Commission, a federal court has temporarily halted a sweepstakes operation based in Fort Lauderdale that took more than $28 million from consumers throughout the United States and other countries, including Australia, Canada, France, Germany, Japan, and the United Kingdom. The FTC seeks to permanently end the allegedly illegal practices and return money to victims.
“This outfit promised people huge prizes and collected millions in fees but never paid out a dime,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If someone says you have to pay to claim a sweepstakes prize, assume it’s a scam.”
According to the FTC’s complaint and other court filings, the defendants mailed personalized letters falsely telling consumers that they had won large cash prizes, typically more than $2 million. The prizes are “guaranteed,” the letters stated, but to collect the money, consumers had to mail the defendants a $20-$30 fee by cash, check or money order. To create a false sense of urgency, they set a deadline, typically 10 days, and warned consumers they would forfeit their winnings if they didn’t pay on time.
In reality, consumers had not won anything. The defendants have no connection to any sweepstakes and cannot award or pay anyone the promised prizes. “Only in dense, confusing language, at the bottom or on the back of the letters,” the FTC explains, do they admit that the only service they provide is compiling “reports” about sweepstakes and contests offered by other parties that are open to the public. By design, the defendants’ disclaimers are unclear and inconspicuous, and fail to alert consumers to the truth, and most consumers don’t even receive the “reports” and would never have agreed to pay $20-$30 for them.
The defendants are Mail Tree Inc.; Michael McKay Co.; Spin Mail Inc.; MCP Marketing Activities LLC, also doing business as Magellan Mail and Magellan Marketing; Trans National Concepts Inc.; Romeria Global LLC, also d/b/a Lowenstein Varick and Nagel; Supreme Media LLC; Vernier Holdings Inc.; Awards Research Consultant LLC; Mailpro Americas Corp.; Masterpiece Marketing LLC, also d/b/a Affiliated Opportunities Group (AOG), Corporate Accounting Authority (CAA), Dispatch Notification Services (DNS), Information Reporting Group (IRG), National Directory Center (NDC), and Priority Information Exchange (PIE); Matthew Pisoni; Marcus Pradel; John Leon; and Victor Ramirez. The court issued an order that temporarily stopped the illegal conduct, froze the defendants’ assets, and appointed a receiver to control the operation while the FTC pursues the case.
The Office of the United States Attorney for the Southern District of Florida arrested Matthew Pisoni, Marcus Pradel, John Leon and Victor Ramirez in connection with the sweepstakes operation.
“No one is permitted to steal hard-earned money from members of our community,” U.S. Attorney Wifredo A. Ferrer said. “This office will work with international, national and local law enforcement agencies to prevent these types of sweepstake fraud schemes, and we will bring those who commit these crimes to justice.”
The FTC would like to thank the United States Postal Inspection Service, the United States Department of Treasury - Internal Revenue Service - Criminal Investigation, the Vancouver Police Department, the Windsor (Ontario) Police Service, and the Metropolitan Police in the United Kingdom for their assistance in this case.
The Commission vote authorizing the staff to file the complaint in the U.S. District Court for the Southern District of Florida was 5-0. The court entered a temporary restraining order against the defendants on May 19, 2015.
To learn how to avoid these kinds of scams, read the FTC's Prize Scams.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
Consumers Lost Millions of Dollars Despite ‘Guarantee’ of Prize Money
At the request of the Federal Trade Commission, a federal court has temporarily halted a sweepstakes operation based in Fort Lauderdale that took more than $28 million from consumers throughout the United States and other countries, including Australia, Canada, France, Germany, Japan, and the United Kingdom. The FTC seeks to permanently end the allegedly illegal practices and return money to victims.
“This outfit promised people huge prizes and collected millions in fees but never paid out a dime,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If someone says you have to pay to claim a sweepstakes prize, assume it’s a scam.”
According to the FTC’s complaint and other court filings, the defendants mailed personalized letters falsely telling consumers that they had won large cash prizes, typically more than $2 million. The prizes are “guaranteed,” the letters stated, but to collect the money, consumers had to mail the defendants a $20-$30 fee by cash, check or money order. To create a false sense of urgency, they set a deadline, typically 10 days, and warned consumers they would forfeit their winnings if they didn’t pay on time.
In reality, consumers had not won anything. The defendants have no connection to any sweepstakes and cannot award or pay anyone the promised prizes. “Only in dense, confusing language, at the bottom or on the back of the letters,” the FTC explains, do they admit that the only service they provide is compiling “reports” about sweepstakes and contests offered by other parties that are open to the public. By design, the defendants’ disclaimers are unclear and inconspicuous, and fail to alert consumers to the truth, and most consumers don’t even receive the “reports” and would never have agreed to pay $20-$30 for them.
The defendants are Mail Tree Inc.; Michael McKay Co.; Spin Mail Inc.; MCP Marketing Activities LLC, also doing business as Magellan Mail and Magellan Marketing; Trans National Concepts Inc.; Romeria Global LLC, also d/b/a Lowenstein Varick and Nagel; Supreme Media LLC; Vernier Holdings Inc.; Awards Research Consultant LLC; Mailpro Americas Corp.; Masterpiece Marketing LLC, also d/b/a Affiliated Opportunities Group (AOG), Corporate Accounting Authority (CAA), Dispatch Notification Services (DNS), Information Reporting Group (IRG), National Directory Center (NDC), and Priority Information Exchange (PIE); Matthew Pisoni; Marcus Pradel; John Leon; and Victor Ramirez. The court issued an order that temporarily stopped the illegal conduct, froze the defendants’ assets, and appointed a receiver to control the operation while the FTC pursues the case.
The Office of the United States Attorney for the Southern District of Florida arrested Matthew Pisoni, Marcus Pradel, John Leon and Victor Ramirez in connection with the sweepstakes operation.
“No one is permitted to steal hard-earned money from members of our community,” U.S. Attorney Wifredo A. Ferrer said. “This office will work with international, national and local law enforcement agencies to prevent these types of sweepstake fraud schemes, and we will bring those who commit these crimes to justice.”
The FTC would like to thank the United States Postal Inspection Service, the United States Department of Treasury - Internal Revenue Service - Criminal Investigation, the Vancouver Police Department, the Windsor (Ontario) Police Service, and the Metropolitan Police in the United Kingdom for their assistance in this case.
The Commission vote authorizing the staff to file the complaint in the U.S. District Court for the Southern District of Florida was 5-0. The court entered a temporary restraining order against the defendants on May 19, 2015.
To learn how to avoid these kinds of scams, read the FTC's Prize Scams.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
CDC ANNOUNCES DROWNING OUTCOMES RELATED TO DESIGNATED DANGEROUS UNDERWATER BREATH-HOLDING BEHAVIORS
FROM: CENTERS FOR DISEASE CONTROL AND PREVENTION
Fatal and Nonfatal Drowning Outcomes Related to Dangerous Underwater Breath-Holding Behaviors — New York State, 1988–2011
Drowning is a preventable public health risk. Through education and policy interventions and increased awareness of these dangerous swimming behaviors, the aquatic health and safety community can play a significant role in decreasing fatalities among all recreational populations. This report identifies a class of swimming behaviors, designated dangerous underwater breath-holding behaviors (DUBBs), that can lead to fatal drowning. These behaviors could easily be prevented to decrease the risk of drowning among otherwise healthy swimmers. These findings expand the domain of active drowning surveillance to consider the epidemiology of contributing behaviors in fatal and non-fatal drowning incidents.
Fatal and Nonfatal Drowning Outcomes Related to Dangerous Underwater Breath-Holding Behaviors — New York State, 1988–2011
Drowning is a preventable public health risk. Through education and policy interventions and increased awareness of these dangerous swimming behaviors, the aquatic health and safety community can play a significant role in decreasing fatalities among all recreational populations. This report identifies a class of swimming behaviors, designated dangerous underwater breath-holding behaviors (DUBBs), that can lead to fatal drowning. These behaviors could easily be prevented to decrease the risk of drowning among otherwise healthy swimmers. These findings expand the domain of active drowning surveillance to consider the epidemiology of contributing behaviors in fatal and non-fatal drowning incidents.
MAN SENTENCED FOR OPERATING CHARITY AS ILLEGAL BANK AND FILING FALSE TAX RETURN
FROM: FDIC AND U.S. ATTORNEY'S OFFICE, DISTRICT OF NEW JERSEY
FOR IMMEDIATE RELEASE
May 19, 2015
Union City, New Jersey, Man Sentenced to 27 Months in Prison for Operating Supposed Charity as Illegal Bank, Falsifying Taxes
NEWARK, N.J. B A Union City, New Jersey, man was sentenced today to 27 months in prison for operating a supposed charitable organization, or “gemach,” as an unchartered bank, accepting millions of dollars in deposits – including nearly $1 million of his own money – which he shielded from state or federal regulation, U.S. Attorney Paul J. Fishman announced.
Moshe Schwartz, 34, a/k/a “David Schwartz” or “Gedalya David Schwartz,” previously pleaded guilty before U.S. District Judge Jose L. Linares to two counts of an information: operating an unchartered bank and aiding and assisting in the filing of a false 2007 tax return. Judge Linares imposed the sentence today in Newark federal court.
According to the information and statements made in court:
Schwartz operated Gemach Shefa Chaim (GSC), purportedly to provide interest-free loans to needy members of the Sanz community in Union City. During his guilty plea proceeding, Schwartz admitted he operated GSC as a bank, with millions of dollars in deposits and more than 350 client accounts by July 2009.
To operate a bank in the United States, a bank is required to obtain a charter from the United States or the state in which the bank operates. Chartered banks are subject to oversight, regulation, and periodic review by federal and state authorities. Neither Schwartz nor GSC had such a charter.
Schwartz admitted that, in operating GSC as a bank, he accepted deposits and credited clients’ accounts, wrote checks from GSC as directed by clients, made transfers between accounts, disbursed client funds upon request, negotiated GSC checks presented by persons other than the named payees, conducted wire transfers, provided clients with receipts of transactions, charged clients a fee for bounced checks and provided overdraft notices to clients. Schwartz also admitted that he opened and maintained various bank accounts at financial institutions in or around North Jersey in the name of GSC and used those institutions to deposit client funds, negotiate checks, provide clients with GSC checks and conduct wire transfers. Because client funds were deposited into and commingled within GSC’s bank accounts at financial institutions, the funds could only be traced back to GSC, thereby concealing the true ownership, nature and source of the funds. Many clients were thus able to use their GSC accounts to engage in suspicious and, at times, illegal activities, including evading federal taxes and money laundering.
Schwartz also admitted that he provided false and fraudulent information to his tax preparer in Union City concerning his income for tax year 2007, falsely representing that his income was $24,475 when it was approximately $208,845. Schwartz admitted that he used his own GSC account and a false identity to conceal his income and assets from the IRS, causing a $74,889 tax loss.
In addition to the prison term, Judge Linares sentenced Schwartz to serve two years supervised release and ordered him to pay restitution of $74,889 and a $60,000 fine.
GSC bank accounts were seized in July 2009 and approximately $500,000 was ultimately forfeited. The accounts had been used by Moshe Altman, 45, Itzak Friedlander, 47, and Shimon Haber, 39, to launder proceeds that cooperating witness Solomon Dwek, 42, had purported to be the proceeds of illegal activities. Altman pleaded guilty in December 2010, to, among other things, conspiring to launder monetary instruments and was sentenced in March 2011 to 41 months in prison. Friedlander pleaded guilty in April 2010 to conspiracy to launder monetary instruments and was sentenced in April 2011 to 24 months in prison. Haber pleaded guilty to the same charge in January 2010 and was sentenced in May 2010 to five months in prison.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing; as well as the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the Federal Deposit Insurance Corporation-Office of Inspector General, under the direction of Special Agent in Charge Francis L. Mace; and the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for their assistance.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren of the Special Prosecutions Division and Frances C. Bajada of the Criminal Division in Newark.
FOR IMMEDIATE RELEASE
May 19, 2015
Union City, New Jersey, Man Sentenced to 27 Months in Prison for Operating Supposed Charity as Illegal Bank, Falsifying Taxes
NEWARK, N.J. B A Union City, New Jersey, man was sentenced today to 27 months in prison for operating a supposed charitable organization, or “gemach,” as an unchartered bank, accepting millions of dollars in deposits – including nearly $1 million of his own money – which he shielded from state or federal regulation, U.S. Attorney Paul J. Fishman announced.
Moshe Schwartz, 34, a/k/a “David Schwartz” or “Gedalya David Schwartz,” previously pleaded guilty before U.S. District Judge Jose L. Linares to two counts of an information: operating an unchartered bank and aiding and assisting in the filing of a false 2007 tax return. Judge Linares imposed the sentence today in Newark federal court.
According to the information and statements made in court:
Schwartz operated Gemach Shefa Chaim (GSC), purportedly to provide interest-free loans to needy members of the Sanz community in Union City. During his guilty plea proceeding, Schwartz admitted he operated GSC as a bank, with millions of dollars in deposits and more than 350 client accounts by July 2009.
To operate a bank in the United States, a bank is required to obtain a charter from the United States or the state in which the bank operates. Chartered banks are subject to oversight, regulation, and periodic review by federal and state authorities. Neither Schwartz nor GSC had such a charter.
Schwartz admitted that, in operating GSC as a bank, he accepted deposits and credited clients’ accounts, wrote checks from GSC as directed by clients, made transfers between accounts, disbursed client funds upon request, negotiated GSC checks presented by persons other than the named payees, conducted wire transfers, provided clients with receipts of transactions, charged clients a fee for bounced checks and provided overdraft notices to clients. Schwartz also admitted that he opened and maintained various bank accounts at financial institutions in or around North Jersey in the name of GSC and used those institutions to deposit client funds, negotiate checks, provide clients with GSC checks and conduct wire transfers. Because client funds were deposited into and commingled within GSC’s bank accounts at financial institutions, the funds could only be traced back to GSC, thereby concealing the true ownership, nature and source of the funds. Many clients were thus able to use their GSC accounts to engage in suspicious and, at times, illegal activities, including evading federal taxes and money laundering.
Schwartz also admitted that he provided false and fraudulent information to his tax preparer in Union City concerning his income for tax year 2007, falsely representing that his income was $24,475 when it was approximately $208,845. Schwartz admitted that he used his own GSC account and a false identity to conceal his income and assets from the IRS, causing a $74,889 tax loss.
In addition to the prison term, Judge Linares sentenced Schwartz to serve two years supervised release and ordered him to pay restitution of $74,889 and a $60,000 fine.
GSC bank accounts were seized in July 2009 and approximately $500,000 was ultimately forfeited. The accounts had been used by Moshe Altman, 45, Itzak Friedlander, 47, and Shimon Haber, 39, to launder proceeds that cooperating witness Solomon Dwek, 42, had purported to be the proceeds of illegal activities. Altman pleaded guilty in December 2010, to, among other things, conspiring to launder monetary instruments and was sentenced in March 2011 to 41 months in prison. Friedlander pleaded guilty in April 2010 to conspiracy to launder monetary instruments and was sentenced in April 2011 to 24 months in prison. Haber pleaded guilty to the same charge in January 2010 and was sentenced in May 2010 to five months in prison.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing; as well as the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the Federal Deposit Insurance Corporation-Office of Inspector General, under the direction of Special Agent in Charge Francis L. Mace; and the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for their assistance.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren of the Special Prosecutions Division and Frances C. Bajada of the Criminal Division in Newark.
SECRETARY KERRY'S REMARKS AT BOEING RENTON FACTORY
FROM: U.S. STATE DEPARTMENT
The World Wants What America Makes
Remarks
John Kerry
Secretary of State
Boeing Renton Factory
Renton, Washington
May 19, 2015
SECRETARY KERRY: Pat, thank you very, very much. I beg your slight indulgence at the beginning of this because I’m suffering from those air miles. (Laughter.) Actually, it’s a combination of allergy and a cold, and I don’t recommend it to anybody. But if I stop occasionally, you’ll understand why.
Pat, thank you for a very generous introduction. Most importantly, thank you for your role and the role of all of these workers and supporters of Boeing. What an extraordinary company. I am delighted to be here at Boeing, although I think, because of this speech, it’s going to be one airplane every 13 hours today, I’m afraid. (Laughter.)
I see our former ambassador to China and former governor and former secretary of commerce here, Gary Locke. It’s great to see you. Thank you for being here with us. (Applause.) And thank you, all of you, for welcoming me to this really beautiful state.
As you may know, I’ve been traveling an awful lot, so when I was told we were landing in Washington, you can imagine my relief when I remembered that it was this Washington – (laughter) – the one with Mount Rainer in the background and Puget Sound at its feet, and the jet plane capital of the world right here in Renton, too, and I’m very, very honored to be here with all of you. Thank you.
My wife Teresa and I have always loved coming to the state of Washington. We have a lot of similarities with our great state of Massachusetts, but I’m very, very glad to be back here today. And being outside here like this, standing here, it kind of brings me back to a few years ago. The people of Washington State are not only warm and welcoming, but your judgment is impeccable, and I particularly appreciated that in November of 2004. (Laughter and applause.) Of course, I’d have been a little bit more grateful if you’d spent a little more time sharing wisdom you’re your friends and relatives back in Ohio. It would have – no. (Laughter.)
But the fact is the quality of your engagement has long been on display in the representatives that you send to Washington through many, many years. From Warren Magnuson to Scoop Jackson to your outstanding House delegation and to my former Senate colleagues Patty Murray and Maria Cantwell, you have always sent the very best to Washington, and both your state and our nation are better for it.
I am especially pleased to be back here at Boeing. I landed many, many times at Boeing Field. I’m delighted to be here next to the Renton Field. Today I finally get a factory tour, and you have no idea how much fun that is for me. Flying has been in my family for generations. My dad was a pilot who enlisted in the Army Air Corps a year before Pearl Harbor and he took me on my very first flight in a Piper J-3 over Washington, D.C. when I was about ten years old. And I’ve been a pilot myself ever since college. And like most pilots, I try to fly whenever I can, whatever I can.
A few years ago, when I was still in the Senate, I made a trip to the Middle East and I was at lunch at an Israeli air force base down in the southern part of Israel. And the colonel who was in charge was an ace from Israel’s Six-Day War and he knew that I had been requesting the opportunity to fly in Israel, so that I could get a bird’s eye view of the security challenges. And Tel Aviv had refused to sign off on the idea of this senator going flying, but I kept badgering. And during lunch at the base, I asked the colonel, “Hey, check with Tel Aviv one more time, see if we could take a flight.” And he comes back to me and he says, “Senator, I hope you didn’t eat too much because we’re going flying.” (Laughter.) So the next thing, I’m driving out with him. I leave my party at the lunch. I drive out to the airfield, they give me a helmet and a suit and we jump in this jet trainer and he says, “The moment we’re off the ground, it’s your airplane.” I said, “Man, he didn’t even check my logbook and – nothing.” (Laughter.) This is – I’m okay with this.
So I grab the stick, up we go, we start flying around. Next thing we know, I’m flying – about three minutes into the flight, I’m flying towards the Red Sea, and there’s a voice in my ear in the helmet saying, “Senator, you better turn faster. You’re going over Egypt.” (Laughter.) And so I turn real hard. And then I asked him if I could do some aerobatics, which I love to do, over the desert. And he gave me the thumbs-up, so I did some rolls and a great big loop, and turned the plane upside down. And below me, spread out below me, I could see the whole Sinai. I could see Aqaba. I could see Jordan. I could see a lot of Israel. And I thought to myself, “Wow, this is fantastic. This is the perfect way to understand the Middle East – upside-down and backwards.” (Laughter.) And I’m telling you, that’s been reinforced to me more and more, day to day.
But I managed to stay current as a pilot all the way up until recently. I haven’t been able to fly as Secretary, so for the first time in years I am not current. They may not let me fly loops anymore, but I have to tell you, as you heard from Pat, as Secretary of State, I practically live, very happily, on a Boeing 757. And we have logged – (applause) – thank you. We have logged over 800,000 miles in a little bit over two years with a huge number of crises, as you know, and a major need to be in personal touch with people building relationships and working for the interests of our country.
But on that note, I figured, since I was here, I’d just come out and ask: Don’t you think I ought to be able to trade up? (Laughter.) I mean, don’t you have a spare Dreamliner parked somewhere around here? (Laughter.) I promise I’ll show it off all over the world – free publicity, just think of it. It’s a win-win, as they say in China.
All kidding aside, I am very, very pleased that the State Department, the Export-Import Bank, the Department of Commerce, as Gary knows, we’ve been able to work really hand-in-hand with Boeing, and we’re proud to do so to vigorously support your business – American business – overseas. And together we have helped facilitate tens of millions, billions of dollars – billions of dollars – in aircraft sales, everywhere from Indonesia, to Brazil, to Kenya, and I’m proud of that. I’ve personally been able to get on the phone with a prime minister or president – and I’m glad to say successfully on some occasions to be able to help close some deals. So I’m proud of those eight years of backlog and I hope it’s going to be 20 before you know it. I’m confident it will be because of the quality of the work you do. (Applause.)
Boeing is America’s leading exporter, one of our top employers, and an incredible innovator and competitor, and you all ought to be as proud of that as we are proud of you. I couldn’t think of a more appropriate place to visit on my way back from Asia to talk about our nation’s leadership role in the glowing – in the growing global economy. And it’s a critically important opportunity to strengthen the long-term security and shared prosperity of our country, and nothing is more important.
Back east, in the other Washington, the House – we’ll give them a moment to take off here. Everybody should cheer. There goes another one. (Cheering and applause.) Back east, in the other Washington, the House and Senate are considering a piece of legislation called the Bipartisan Congressional Trade Priorities and Accountability Act. I know, that’s a mouthful. But it boils down to whether President Obama should have the authority to conclude and put before Congress the two most significant trade agreements in our history – the Transatlantic Trade and Investment Partnership and the TPP – the Trans-Pacific Partnership.
The TPP is currently made up of 12 countries along the Pacific Rim, including, obviously, the United States. The deal, which is in the final stages of negotiation, would encompass 40 percent of the world’s economy. And as with any complex agreement, my friends, there are many details to be hashed out, but the reasons why it is important are straightforward and sensible.
First of all, in the modern world, we can’t just expect our economies to grow if all we do is buy and sell to ourselves. It’s just not going to happen. Trade supports jobs and it builds prosperity – period. And the record of the past five, ten, fifty or a hundred years bears that out. As I speak, exports support about 11.7 million American jobs. And that number is only going to go up. Why? It’s pretty simple; it’s really simple math: 95 percent of the world’s consumers live beyond the borders of the United States. And if for some reason we just decide to give up and not to do business with them, to shut down because we think somehow it’s a loss of a job here, believe me, a lot of other people will welcome that at our expense.
And as a veteran of 28 years in the Senate, who voted on every trade agreement during that period, I know and understand the delicate relationship between the trade issue and American workers. For years, we built a consensus in America based on the argument that the benefits of trade would be passed up and down the economic food chain, benefitting everyone. I have to say that, regrettably, in recent years, the consensus for trade that was built on that principle – (sound of plane taking off) – (applause). Do you feel like that’s a baby leaving the family? (Laughter.) But it’s good. The consensus that allowed us to engage in trade through all those years, the principle that it was built on has actually become frayed, because not enough of the benefits are, in fact, being passed on. And the anger and frustration that has come from that has translated into opposition to trade itself, when the real focus ought to be on the other policy reforms that are necessary to address that concern. For example, on improving tax policy, on strengthening international labor and environmental standards, as is actually being done in these two deals that I’m talking about. The solution lies not in shutting the door to trade itself, but in transforming the system to make it work for everybody.
So let me be clear: If we pick the wrong culprit, we will cut off our nose to spite our face. And so as orders shift from us to the rest of the world’s producers, the result would be boarded-up windows and “going out of business” signs in places from one end of America to another. We could see dockworkers with pink slips in their hands instead of container ships steaming into and out of ports. We could even see aerospace companies shutting down some of those assembly lines because there’s been a reduction in the incentive for people to buy planes from our country. The truth is, the only people we know or I know who would benefit from a decision by the United States not to participate in the TPP would be international competitors. And believe me, they would be delighted.
Here in Seattle, you know this. You know this instinctively and you know it empirically too. In 1971, the city of Seattle was in such decline that one of the most famous billboards in our country read: “Will the last person leaving Seattle turn out the lights?” A little over 40 years later, the census bureau named Seattle the fastest-growing city in the United States of America. That transformation is thanks in part to the fact that your state is among the leading exporters in our union, with sales topping $90 billion in 2014 – more than a 200 percent increase from just a decade ago.
The Seattle-Tacoma-Bellevue area is our country’s fourth-largest export hub by volume. And even though Boeing tops the list, your state’s exports don’t just come from a handful of companies. Washington has more than 12,600 exporting firms whose sales abroad support about 400,000 jobs. And in addition to aircraft, the state is renowned for its software, its coffee products, its apples, its wheat, its fish, its wine, its machinery, and its lumber. And what is more, some of your top customers are among the 11 other countries participating in the TPP, including Japan, Canada.
So let’s be clear. Washington State is a trade leader because you discovered a long time ago that it’s in your best interest to do business with the world. Now, no one compelled this decision. No one compelled your predecessors to engage in lucrative trade deals. You saw the common sense of it. In fact, more than a century ago, the workers for a company right here in Renton were making railway cars for export to the Far East. And they did it because Seattle is the gateway to the Pacific and because it simply makes good economic sense to go where the customers are.
Guess what? That logic still holds today. And if you only sell to a limited market, believe me, your standard of living will stagnate or decline. Obviously, on its face, that’s not a very smart formula. The bottom line is that if we want to make it in America – in every respect make it – we have to sell what we make in America to partners across the equator and every part of the world, from pole to pole. And to give our firms the best chance to compete, my friends, we need agreements on trade.
So the rules of the road are clear. And this brings me to the second big reason why the Trans-Pacific Partnership is so vital: It will enable us to play a critical role in helping to determine the highest standard rules for trade.
In the United States, we’ve fought hard for years – it didn’t come easily; go back to the 1800s. Not everybody was treated the way they are today in the workplace. It was a hard-fought struggle. And for years we fought to make sure that workers were protected so that economic growth doesn’t come on the backs of exploited people. And we care that businesses adhere to environmental standards so that families continue to enjoy clean air and the water that they deserve, no matter how close they live to factories or to other industrial facilities. And we believe that rather than putting aside the things we care about in order to compete with the rest of the world in a low-standards race to the bottom, we should help bring the rest of the world up to meet the high standards by which American businesses now operate.
That is exactly what the legislation before Congress would allow us to do.
My friends, we can’t farm out to other nations the core interests of the United States of America. When it comes to the jobs of U.S. workers and the paychecks of U.S. families, we’ve got to be our own prime contractors; we can’t entrust to any other country the responsibility for preserving the American Dream.
Right now in the Asia Pacific, we have the chance to finalize a trade agreement that is truly unlike any other ever negotiated: an agreement where every participant has to comply with core international labor and environmental standards; where every participant has to refrain from using under-age workers and unsafe workplaces; where every participant has to ensure that nationally owned companies compete fairly with ones that are privately owned; and where every participant has to fight trade-related bribery and corruption, support legitimate digital trade, safeguards – intellectual property safeguards, and guarantees the promises that they make are promises that they have to keep, because they’re enforceable in the agreement. We didn’t have an agreement, none of that happens. That’s not a complicated choice. By any standard, the agreement that I just outlined is an historic trade agreement.
The TPP is not your grandparents’ trade agreement; it’s not your mom and dad’s trade agreement; it’s not even your older brother or sister’s trade agreement. This is a new, new entity, and ultimately, this is a 21st century agreement where the key understandings and high standards are baked right into the four corners of the text – not in a side agreement, not in a letter, but in the text of the agreement itself.
Now as you know, Congress has already begun a new round of deliberations on trade. Parts of the debate have been on related issues, but on the key question of whether the Trans-Pacific Partnership will be good for our country, the arguments against have been sincere, they’ve been passionate, but I have to say to you today that I believe they are also deeply flawed.
For example, opponents contend that Congress and the public haven’t had a chance to read the text of the proposed deal. Well, the truth is members of Congress, who were sent to Washington, D.C. to represent the public, have had access to it for years. Now, of course, some confidentiality, I think most of you understand, is required in any kind of multilateral negotiation. There are obvious reasons why we don’t release every single sentence every day as it’s being discussed. When you do that, words get distorted, arguments are undermined, and ultimately, consensus and a deal become much harder to arrive at. Even labor contracts and other contracts here in this country are more often than not done in a way that they’re negotiated and then presented to people.
And there’s one thing that I learned in this job from negotiating with friends and foes alike – it’s that you have the best chance of success when you’re not negotiating in public every day. It’s the only way to keep the process moving forward and to gain the concessions that we seek from other countries. Senators who are unhappy about this might recall the locked doors and closed windows that marked America’s constitutional convention 228 years ago, without which we wouldn’t even have a Senate today.
The important thing about the TPP, my friends, as with our Constitution, is that the final text will be made public. In fact, it will be posted online for a minimum of 60 days before President Obama even signs it. And only after the public has had a chance to review it would it then go before Congress for hearings and for a full and open debate in the United States Congress. My friends, that’s not secrecy at work; that’s democracy at work, and it’s the way we’ve done business in our country for a very long time.
A second argument we hear against TPP is that other countries could use it to dismantle America’s environmental standards, Wall Street reforms, minimum wage laws, food safety guidelines, and on and on. I have heard that argument about every single trade agreement that we’ve ever passed, and it has never happened. And if that were true, I can promise you I would oppose the agreement myself. But it’s not true. The agreement won’t take away any sovereign rights of our nation, of any nation. It’s not going to allow anyone to change our laws other than the United States Congress. Rest assured, with the TPP in place, we will retain our ability to protect our clean air and water, regulate our economy, and uphold all of the laws of our nation. And I have fought my entire career for many of those things, and I don’t intend to start undoing a lifetime of work now and turning my back on all of that overnight.
The third major argument that you hear against TPP is the standard line about outsourcing and globalization. Now, this is a kind of gut reaction that I respect. It reflects the real impacts that Americans feel sometimes as the result of technological and economic transitions that are always taking place in a nation on the move. It’s a genuine feeling, and I’ve talked to many workers in many states through the course of my career who have been affected by change, and many of you know them. Some of you may be them.
But I want to emphasize: This concern needs to be directed at the right target. Outsourcing occurs because of the mobility of capital and labor and market competition. And the remedy is not to pull back from trade agreements themselves or to attempt to stop globalization, because that’s not possible. Globalization has no reverse gear, my friends. As technology continues to evolve, as more and more people in the world have smartphones and look and listen to what people are doing and thinking in other countries, the world will become more interconnected, not less. And no politician anywhere in the world has the power to change people’s desires to be connected, to be part of the world, and in many ways to share what they see other people having that they want themselves.
So no matter how hard people may try to pretend otherwise, no matter how many politicians may stand up and appeal to the instinct to play to that fear, the fact is globalization is here to stay. No one can put that genie back in the bottle. What we can do is mitigate the negative impacts. And in the end, when you measure all the benefits against all the negatives, I believe the balance says it is absolutely a good thing for our nation and for the world.
From our nation’s earliest days, we have been trying to encourage more people – just think about this. For years, we’ve encouraged people: Embrace democracy, be like us, join capitalism, compete in the free market. We’ve urged them to adopt our economic system, our rules. We want people to support an open marketplace and capitalism and the free flow of investment. We deeply value the ability to start up a company, make a product, sell it worldwide, take a risk. That’s how we’ve always defined America. And we have argued for centuries that the most responsible role government can play is to respect commerce – not impose government will, but develop a framework of the core principles built on freedom – freedom to take a risk, freedom to invest, freedom to take the job you want – and then get government out of the way and let the private sector do what it does so well in this nation.
Well we now have nations around the world eager to embrace that or already embracing that. Their economic interests compel them to do so. They know it’s the only way that they can be competitive in today’s globalized world, and they don’t want to get left behind. We too have to accept the fact that changes to the global economic system will happen with us or without us. So instead of resisting change, we ought to be investing in our people in order to make sure we can take advantage of that change.
We have to continue taking critical steps that will make us more competitive and spread the benefits of globalization far and wide, including, as President Obama has proposed, through trade adjustment assistance, through lifelong learning, through support for innovation and research; from helping every young person to get a higher education, and from reauthorizing crucial institutions such as the Export-Import Bank, which are helping local, small manufacturers like the Measurement Technology Northwest Inc. and Engineered Compost Systems expand their global footprint abroad. We also need to help hire new workers to fill the export orders that are coming from new markets overseas, including from countries in the Asia Pacific, as we know and as Pat just mentioned to you.
More of us also need to share the confidence that our parents and our grandparents had when they built this country out of the ashes of war – and frankly, the confidence that so many young entrepreneurs are exhibiting today. Remember, just three decades ago, experts were predicting that competition from the Japanese on their semiconductors – remember this? – computers and cars would cause America to become, and I quote, “a nation of short-order cooks and salespeople.”
Today, Japan’s automakers have set up plants that support jobs for tens of thousands of workers here in America. And despite all of the publicity about outsourcing, in the past five years, our manufacturing sector has been growing at twice the rate of the overall economy. Sometimes it really amazes me, folks, how short the public memory is. A lot of people forget that only six years ago, when President Obama first took office, right before he took office, we were on the brink of economic disaster. Iconic companies were filing for bankruptcy. Unemployment was approaching 10 percent. Our entire financial structure was on the brink of collapse. And when I say this, I am not exaggerating. I’m just repeating what a Republican secretary of the treasury said when he came to the Capitol Hill to implore my Senate colleagues and I to authorize a bailout of the system. And today, while nobody is claiming victory yet, the United States has added 12.3 million jobs over 62 straight months of private sector growth – the longest streak on record. We’ve put more people back to work than all of the other advanced economies combined. And a big cause of this turnaround is that our experts have reached a – our exports have reached a record level. They are up nearly 50 percent since 2009.
That tells a story. And it’s no accident, folks. That’s the result of the most determined, competitive, entrepreneurial business and talented workers in the world. It’s also the result of some smart policy – policy that is based on the idea that when we increase what America sells overseas, our payrolls get larger, our paychecks get fatter. On the average, export-supported jobs pay significantly more than other jobs. So we’re talking quality jobs, not just quantity. And if we were satisfied with this progress, well, perhaps we could just sit back and forget about new trade agreements and the chance to further pry open the international markets where 19 out of 20 of the world’s consumers live. Try that.
Happily, we’re not satisfied. Because we know that even if we attempt to stand still, nobody else will, or most won’t. And we’re going to get blown away economically in the process. We have to keep finding new markets. We have to keep creating those new jobs. And we’ve got to ensure that our workers – farmers, ranchers, businesses – receive equitable treatment in that marketplace. We can’t do that, folks, by sitting on the sidelines. You can’t be on the side of the road while other countries are writing the rules of the road for the rest of the world’s trade. We’ve got to be engaged. We’ve got to lead. And by the way, most Americans inherently understand that.
A recent poll shows that almost three out of five of our citizens view foreign trade as an opportunity, not a threat. And here’s the reason: The U.S. market is one of the most open in the world. Seventy percent of U.S. imports cross our borders tariff-free. You’ve all seen these duty-free stores at airports, right? Well, America is pretty much one big duty-free shop. That’s not the case with all – excuse me – with all of our partners. Our automakers face tariffs of up to 30 percent in Malaysia. Our poultry farmers face tariffs of up to 40 percent in Vietnam. Washington apples are charged a markup of 17 percent in Japan. And what about the great wine that you produce here in Columbia and the Walla Walla Valley? Tariffs on wine in Japan and Vietnam are as high as 50 percent. Not only that, America’s environmental and labor standards are among the highest in the world.
And that’s why we have so much to gain and nothing to lose by reaching deals that lower trade barriers, lower the tariffs, raise global norms – and we should also remember that if we don’t clinch free trade agreements in the Asia Pacific, it doesn’t mean that those agreements may not happen. It just means that we may not be part of them and we may not shape them. The standards will be driven down instead of up, and the business we might have had will go to our competitors instead. Even now, Washington apples are losing out to Chinese apples in Malaysia because Beijing has a preferential trade agreement with that country and we don’t. And Japan and Australia just signed a pact that will allow Australian beef into the Japanese market at a lower tariff than American beef. It just doesn’t make a lot of sense for us to sit here and watch. And I’m sure it doesn’t make a lot of sense to you.
It’s not just giant firms like Boeing, by the way, and Starbucks, and Costco, and Microsoft, and Amazon that we’re caring about here. Small and medium-sized businesses are really the linchpin of the American economy. In fact, they’re the source of two out of every three new jobs that we create in this country. But these firms also confront a unique set of challenges when they’re trying to increase exports. For example, the Cascade Design Company that is based in Seattle exports outdoor recreation equipment to some 40 countries. But it could sell far more if its customers didn’t have to pay high tariffs in exactly the markets that we will open through the TPP.
There’s a long list of examples like that; I’m not going to go through all of them. But the TPP will lower tariffs on American exports. It will ensure that TPP countries treat American products the same way that we treat products from their own firms. It will cut red tape. It will reduce bureaucracy for our small businesses and family farms. And it will help our companies participate more directly in new global supply chains that are creating unprecedented opportunities all around the world. When you add it all up, the economic case for trade promotion authority and for TPP is not even a close call in my judgment – it’s overwhelming. And as Secretary of State, let me put this in a perspective of global challenges.
It is no secret that the world in the future looks pretty complicated right now. The turbulence that we see comes from a combination of factors, including the fact that even as the world grows closer, there are powerful forces pulling people apart – terrorism, extreme nationalism, conflicts over resources, a huge number of people coming of age in parts of the world where there simply aren’t enough jobs. This creates a race between opportunity and frustration that we can’t afford to lose. Expanded trade can help us win that race by spurring innovation and – and as we’ve seen in Asia and elsewhere – helping hundreds of millions of people to lift themselves out of poverty. And poverty, my friends, is where you see much of this violent extremism born.
Just as important, trade agreements such as the TPP will help to knit America and our partners together so that we are better able to cooperate on other areas. It helps to create a community of common interests on trade that will reinforce trust and helps us expand our cooperation in other areas. And that matters, my friends, because the Asia Pacific is the single-most dynamic part of the globe today and where much of the history of this century is going to be written. It includes the four most populous countries, the three largest economies, and a huge and rapidly growing middle class that want to fly in the planes that you build here.
The good news is that our engagement in this region is welcome and making a difference because our partners know that our markets – and even our futures – are absolutely closely linked together. If we were to retreat from the Asia Pacific, and if our friends were in turn to turn their backs on us, we would face a much different world than we have known in recent decades. And it would not be a world that is more secure.
So let me be clear. We know that our goals in the Pacific are critical because we want what most countries in the region seek: a place where the sovereignty of every state is respected, whether they’re big or small; a region where disputes are settled openly and in accordance with rule of law. We – all of us frankly – can help make this happen if we’re as fully involved economically just as we are diplomatically. In fact, as my colleague Ash Carter, the Secretary of Defense, has suggested, the Trans-Pacific Partnership is as important to American interests in the Asia Pacific as our military posture. Completing the TPP would send a message throughout the region as well as the world that America is – and will continue to be – a leading force for prosperity and security in the Asia Pacific. That is good for the United States; it’s good for our trading partners; and it is definitely good for companies and workers here in the American Northwest.
So here’s the bottom line: 2015 is simply not the time for us to decide that trade negotiations are too hard, nor to – it’s not the time to vacate the field and ignore 70 years of lessons from the Great Depression and World War II. It’s not the time for us to sit back and allow the principles of free and open trade to be supplanted by the discredited and empty prospects of protectionism and mercantilism.
There is nothing progressive about blaming trade or trade agreements for the inevitable economic shifts that are brought on by technology and time. There is nothing liberal about clinging to the past when the future is filled with opportunities to innovate and create whole new industries. And there is nothing more in keeping with the traditions of Washington State – American traditions – than to look over the horizon for the connections that will create a stronger, more prosperous, and secure future for the people of this region and of all America.
My friends, more than 50 years ago, when Seattle hosted the World’s Fair, American exports were worth only about one-twentieth of their value today. In the decades since, our commercial relationships have been utterly transformed; our leading manufacturers have changed; our trade in service has exploded; and technology has made what was not even imaginable the new normal.
We are living in a wholly different world, an exciting time, except for one thing: the need for American leadership. Like the generation of Warren Magnuson and Henry “Scoop” Jackson, our generation faces a test that we cannot allow partisanship or any other source of internal division to prevent us from meeting. We have an opportunity before us to shape and elevate the global rules of trade for decades to come.
We cannot shy away from this task, just as we cannot walk backwards into the future. Like mariners; like sea hawks – with a small s (laughter); like the proud employees of Boeing; we need to face the world and all its challenges with the confidence in who we are, what we stand for, and our incredible ability to compete. That’s what we must do. And I am confident, as I look around this extraordinary manufacturing center, as I look at all of you, that the United States will get this done and Washington State is going to help us do it.
Thank you. (Applause.)
The World Wants What America Makes
Remarks
John Kerry
Secretary of State
Boeing Renton Factory
Renton, Washington
May 19, 2015
SECRETARY KERRY: Pat, thank you very, very much. I beg your slight indulgence at the beginning of this because I’m suffering from those air miles. (Laughter.) Actually, it’s a combination of allergy and a cold, and I don’t recommend it to anybody. But if I stop occasionally, you’ll understand why.
Pat, thank you for a very generous introduction. Most importantly, thank you for your role and the role of all of these workers and supporters of Boeing. What an extraordinary company. I am delighted to be here at Boeing, although I think, because of this speech, it’s going to be one airplane every 13 hours today, I’m afraid. (Laughter.)
I see our former ambassador to China and former governor and former secretary of commerce here, Gary Locke. It’s great to see you. Thank you for being here with us. (Applause.) And thank you, all of you, for welcoming me to this really beautiful state.
As you may know, I’ve been traveling an awful lot, so when I was told we were landing in Washington, you can imagine my relief when I remembered that it was this Washington – (laughter) – the one with Mount Rainer in the background and Puget Sound at its feet, and the jet plane capital of the world right here in Renton, too, and I’m very, very honored to be here with all of you. Thank you.
My wife Teresa and I have always loved coming to the state of Washington. We have a lot of similarities with our great state of Massachusetts, but I’m very, very glad to be back here today. And being outside here like this, standing here, it kind of brings me back to a few years ago. The people of Washington State are not only warm and welcoming, but your judgment is impeccable, and I particularly appreciated that in November of 2004. (Laughter and applause.) Of course, I’d have been a little bit more grateful if you’d spent a little more time sharing wisdom you’re your friends and relatives back in Ohio. It would have – no. (Laughter.)
But the fact is the quality of your engagement has long been on display in the representatives that you send to Washington through many, many years. From Warren Magnuson to Scoop Jackson to your outstanding House delegation and to my former Senate colleagues Patty Murray and Maria Cantwell, you have always sent the very best to Washington, and both your state and our nation are better for it.
I am especially pleased to be back here at Boeing. I landed many, many times at Boeing Field. I’m delighted to be here next to the Renton Field. Today I finally get a factory tour, and you have no idea how much fun that is for me. Flying has been in my family for generations. My dad was a pilot who enlisted in the Army Air Corps a year before Pearl Harbor and he took me on my very first flight in a Piper J-3 over Washington, D.C. when I was about ten years old. And I’ve been a pilot myself ever since college. And like most pilots, I try to fly whenever I can, whatever I can.
A few years ago, when I was still in the Senate, I made a trip to the Middle East and I was at lunch at an Israeli air force base down in the southern part of Israel. And the colonel who was in charge was an ace from Israel’s Six-Day War and he knew that I had been requesting the opportunity to fly in Israel, so that I could get a bird’s eye view of the security challenges. And Tel Aviv had refused to sign off on the idea of this senator going flying, but I kept badgering. And during lunch at the base, I asked the colonel, “Hey, check with Tel Aviv one more time, see if we could take a flight.” And he comes back to me and he says, “Senator, I hope you didn’t eat too much because we’re going flying.” (Laughter.) So the next thing, I’m driving out with him. I leave my party at the lunch. I drive out to the airfield, they give me a helmet and a suit and we jump in this jet trainer and he says, “The moment we’re off the ground, it’s your airplane.” I said, “Man, he didn’t even check my logbook and – nothing.” (Laughter.) This is – I’m okay with this.
So I grab the stick, up we go, we start flying around. Next thing we know, I’m flying – about three minutes into the flight, I’m flying towards the Red Sea, and there’s a voice in my ear in the helmet saying, “Senator, you better turn faster. You’re going over Egypt.” (Laughter.) And so I turn real hard. And then I asked him if I could do some aerobatics, which I love to do, over the desert. And he gave me the thumbs-up, so I did some rolls and a great big loop, and turned the plane upside down. And below me, spread out below me, I could see the whole Sinai. I could see Aqaba. I could see Jordan. I could see a lot of Israel. And I thought to myself, “Wow, this is fantastic. This is the perfect way to understand the Middle East – upside-down and backwards.” (Laughter.) And I’m telling you, that’s been reinforced to me more and more, day to day.
But I managed to stay current as a pilot all the way up until recently. I haven’t been able to fly as Secretary, so for the first time in years I am not current. They may not let me fly loops anymore, but I have to tell you, as you heard from Pat, as Secretary of State, I practically live, very happily, on a Boeing 757. And we have logged – (applause) – thank you. We have logged over 800,000 miles in a little bit over two years with a huge number of crises, as you know, and a major need to be in personal touch with people building relationships and working for the interests of our country.
But on that note, I figured, since I was here, I’d just come out and ask: Don’t you think I ought to be able to trade up? (Laughter.) I mean, don’t you have a spare Dreamliner parked somewhere around here? (Laughter.) I promise I’ll show it off all over the world – free publicity, just think of it. It’s a win-win, as they say in China.
All kidding aside, I am very, very pleased that the State Department, the Export-Import Bank, the Department of Commerce, as Gary knows, we’ve been able to work really hand-in-hand with Boeing, and we’re proud to do so to vigorously support your business – American business – overseas. And together we have helped facilitate tens of millions, billions of dollars – billions of dollars – in aircraft sales, everywhere from Indonesia, to Brazil, to Kenya, and I’m proud of that. I’ve personally been able to get on the phone with a prime minister or president – and I’m glad to say successfully on some occasions to be able to help close some deals. So I’m proud of those eight years of backlog and I hope it’s going to be 20 before you know it. I’m confident it will be because of the quality of the work you do. (Applause.)
Boeing is America’s leading exporter, one of our top employers, and an incredible innovator and competitor, and you all ought to be as proud of that as we are proud of you. I couldn’t think of a more appropriate place to visit on my way back from Asia to talk about our nation’s leadership role in the glowing – in the growing global economy. And it’s a critically important opportunity to strengthen the long-term security and shared prosperity of our country, and nothing is more important.
Back east, in the other Washington, the House – we’ll give them a moment to take off here. Everybody should cheer. There goes another one. (Cheering and applause.) Back east, in the other Washington, the House and Senate are considering a piece of legislation called the Bipartisan Congressional Trade Priorities and Accountability Act. I know, that’s a mouthful. But it boils down to whether President Obama should have the authority to conclude and put before Congress the two most significant trade agreements in our history – the Transatlantic Trade and Investment Partnership and the TPP – the Trans-Pacific Partnership.
The TPP is currently made up of 12 countries along the Pacific Rim, including, obviously, the United States. The deal, which is in the final stages of negotiation, would encompass 40 percent of the world’s economy. And as with any complex agreement, my friends, there are many details to be hashed out, but the reasons why it is important are straightforward and sensible.
First of all, in the modern world, we can’t just expect our economies to grow if all we do is buy and sell to ourselves. It’s just not going to happen. Trade supports jobs and it builds prosperity – period. And the record of the past five, ten, fifty or a hundred years bears that out. As I speak, exports support about 11.7 million American jobs. And that number is only going to go up. Why? It’s pretty simple; it’s really simple math: 95 percent of the world’s consumers live beyond the borders of the United States. And if for some reason we just decide to give up and not to do business with them, to shut down because we think somehow it’s a loss of a job here, believe me, a lot of other people will welcome that at our expense.
And as a veteran of 28 years in the Senate, who voted on every trade agreement during that period, I know and understand the delicate relationship between the trade issue and American workers. For years, we built a consensus in America based on the argument that the benefits of trade would be passed up and down the economic food chain, benefitting everyone. I have to say that, regrettably, in recent years, the consensus for trade that was built on that principle – (sound of plane taking off) – (applause). Do you feel like that’s a baby leaving the family? (Laughter.) But it’s good. The consensus that allowed us to engage in trade through all those years, the principle that it was built on has actually become frayed, because not enough of the benefits are, in fact, being passed on. And the anger and frustration that has come from that has translated into opposition to trade itself, when the real focus ought to be on the other policy reforms that are necessary to address that concern. For example, on improving tax policy, on strengthening international labor and environmental standards, as is actually being done in these two deals that I’m talking about. The solution lies not in shutting the door to trade itself, but in transforming the system to make it work for everybody.
So let me be clear: If we pick the wrong culprit, we will cut off our nose to spite our face. And so as orders shift from us to the rest of the world’s producers, the result would be boarded-up windows and “going out of business” signs in places from one end of America to another. We could see dockworkers with pink slips in their hands instead of container ships steaming into and out of ports. We could even see aerospace companies shutting down some of those assembly lines because there’s been a reduction in the incentive for people to buy planes from our country. The truth is, the only people we know or I know who would benefit from a decision by the United States not to participate in the TPP would be international competitors. And believe me, they would be delighted.
Here in Seattle, you know this. You know this instinctively and you know it empirically too. In 1971, the city of Seattle was in such decline that one of the most famous billboards in our country read: “Will the last person leaving Seattle turn out the lights?” A little over 40 years later, the census bureau named Seattle the fastest-growing city in the United States of America. That transformation is thanks in part to the fact that your state is among the leading exporters in our union, with sales topping $90 billion in 2014 – more than a 200 percent increase from just a decade ago.
The Seattle-Tacoma-Bellevue area is our country’s fourth-largest export hub by volume. And even though Boeing tops the list, your state’s exports don’t just come from a handful of companies. Washington has more than 12,600 exporting firms whose sales abroad support about 400,000 jobs. And in addition to aircraft, the state is renowned for its software, its coffee products, its apples, its wheat, its fish, its wine, its machinery, and its lumber. And what is more, some of your top customers are among the 11 other countries participating in the TPP, including Japan, Canada.
So let’s be clear. Washington State is a trade leader because you discovered a long time ago that it’s in your best interest to do business with the world. Now, no one compelled this decision. No one compelled your predecessors to engage in lucrative trade deals. You saw the common sense of it. In fact, more than a century ago, the workers for a company right here in Renton were making railway cars for export to the Far East. And they did it because Seattle is the gateway to the Pacific and because it simply makes good economic sense to go where the customers are.
Guess what? That logic still holds today. And if you only sell to a limited market, believe me, your standard of living will stagnate or decline. Obviously, on its face, that’s not a very smart formula. The bottom line is that if we want to make it in America – in every respect make it – we have to sell what we make in America to partners across the equator and every part of the world, from pole to pole. And to give our firms the best chance to compete, my friends, we need agreements on trade.
So the rules of the road are clear. And this brings me to the second big reason why the Trans-Pacific Partnership is so vital: It will enable us to play a critical role in helping to determine the highest standard rules for trade.
In the United States, we’ve fought hard for years – it didn’t come easily; go back to the 1800s. Not everybody was treated the way they are today in the workplace. It was a hard-fought struggle. And for years we fought to make sure that workers were protected so that economic growth doesn’t come on the backs of exploited people. And we care that businesses adhere to environmental standards so that families continue to enjoy clean air and the water that they deserve, no matter how close they live to factories or to other industrial facilities. And we believe that rather than putting aside the things we care about in order to compete with the rest of the world in a low-standards race to the bottom, we should help bring the rest of the world up to meet the high standards by which American businesses now operate.
That is exactly what the legislation before Congress would allow us to do.
My friends, we can’t farm out to other nations the core interests of the United States of America. When it comes to the jobs of U.S. workers and the paychecks of U.S. families, we’ve got to be our own prime contractors; we can’t entrust to any other country the responsibility for preserving the American Dream.
Right now in the Asia Pacific, we have the chance to finalize a trade agreement that is truly unlike any other ever negotiated: an agreement where every participant has to comply with core international labor and environmental standards; where every participant has to refrain from using under-age workers and unsafe workplaces; where every participant has to ensure that nationally owned companies compete fairly with ones that are privately owned; and where every participant has to fight trade-related bribery and corruption, support legitimate digital trade, safeguards – intellectual property safeguards, and guarantees the promises that they make are promises that they have to keep, because they’re enforceable in the agreement. We didn’t have an agreement, none of that happens. That’s not a complicated choice. By any standard, the agreement that I just outlined is an historic trade agreement.
The TPP is not your grandparents’ trade agreement; it’s not your mom and dad’s trade agreement; it’s not even your older brother or sister’s trade agreement. This is a new, new entity, and ultimately, this is a 21st century agreement where the key understandings and high standards are baked right into the four corners of the text – not in a side agreement, not in a letter, but in the text of the agreement itself.
Now as you know, Congress has already begun a new round of deliberations on trade. Parts of the debate have been on related issues, but on the key question of whether the Trans-Pacific Partnership will be good for our country, the arguments against have been sincere, they’ve been passionate, but I have to say to you today that I believe they are also deeply flawed.
For example, opponents contend that Congress and the public haven’t had a chance to read the text of the proposed deal. Well, the truth is members of Congress, who were sent to Washington, D.C. to represent the public, have had access to it for years. Now, of course, some confidentiality, I think most of you understand, is required in any kind of multilateral negotiation. There are obvious reasons why we don’t release every single sentence every day as it’s being discussed. When you do that, words get distorted, arguments are undermined, and ultimately, consensus and a deal become much harder to arrive at. Even labor contracts and other contracts here in this country are more often than not done in a way that they’re negotiated and then presented to people.
And there’s one thing that I learned in this job from negotiating with friends and foes alike – it’s that you have the best chance of success when you’re not negotiating in public every day. It’s the only way to keep the process moving forward and to gain the concessions that we seek from other countries. Senators who are unhappy about this might recall the locked doors and closed windows that marked America’s constitutional convention 228 years ago, without which we wouldn’t even have a Senate today.
The important thing about the TPP, my friends, as with our Constitution, is that the final text will be made public. In fact, it will be posted online for a minimum of 60 days before President Obama even signs it. And only after the public has had a chance to review it would it then go before Congress for hearings and for a full and open debate in the United States Congress. My friends, that’s not secrecy at work; that’s democracy at work, and it’s the way we’ve done business in our country for a very long time.
A second argument we hear against TPP is that other countries could use it to dismantle America’s environmental standards, Wall Street reforms, minimum wage laws, food safety guidelines, and on and on. I have heard that argument about every single trade agreement that we’ve ever passed, and it has never happened. And if that were true, I can promise you I would oppose the agreement myself. But it’s not true. The agreement won’t take away any sovereign rights of our nation, of any nation. It’s not going to allow anyone to change our laws other than the United States Congress. Rest assured, with the TPP in place, we will retain our ability to protect our clean air and water, regulate our economy, and uphold all of the laws of our nation. And I have fought my entire career for many of those things, and I don’t intend to start undoing a lifetime of work now and turning my back on all of that overnight.
The third major argument that you hear against TPP is the standard line about outsourcing and globalization. Now, this is a kind of gut reaction that I respect. It reflects the real impacts that Americans feel sometimes as the result of technological and economic transitions that are always taking place in a nation on the move. It’s a genuine feeling, and I’ve talked to many workers in many states through the course of my career who have been affected by change, and many of you know them. Some of you may be them.
But I want to emphasize: This concern needs to be directed at the right target. Outsourcing occurs because of the mobility of capital and labor and market competition. And the remedy is not to pull back from trade agreements themselves or to attempt to stop globalization, because that’s not possible. Globalization has no reverse gear, my friends. As technology continues to evolve, as more and more people in the world have smartphones and look and listen to what people are doing and thinking in other countries, the world will become more interconnected, not less. And no politician anywhere in the world has the power to change people’s desires to be connected, to be part of the world, and in many ways to share what they see other people having that they want themselves.
So no matter how hard people may try to pretend otherwise, no matter how many politicians may stand up and appeal to the instinct to play to that fear, the fact is globalization is here to stay. No one can put that genie back in the bottle. What we can do is mitigate the negative impacts. And in the end, when you measure all the benefits against all the negatives, I believe the balance says it is absolutely a good thing for our nation and for the world.
From our nation’s earliest days, we have been trying to encourage more people – just think about this. For years, we’ve encouraged people: Embrace democracy, be like us, join capitalism, compete in the free market. We’ve urged them to adopt our economic system, our rules. We want people to support an open marketplace and capitalism and the free flow of investment. We deeply value the ability to start up a company, make a product, sell it worldwide, take a risk. That’s how we’ve always defined America. And we have argued for centuries that the most responsible role government can play is to respect commerce – not impose government will, but develop a framework of the core principles built on freedom – freedom to take a risk, freedom to invest, freedom to take the job you want – and then get government out of the way and let the private sector do what it does so well in this nation.
Well we now have nations around the world eager to embrace that or already embracing that. Their economic interests compel them to do so. They know it’s the only way that they can be competitive in today’s globalized world, and they don’t want to get left behind. We too have to accept the fact that changes to the global economic system will happen with us or without us. So instead of resisting change, we ought to be investing in our people in order to make sure we can take advantage of that change.
We have to continue taking critical steps that will make us more competitive and spread the benefits of globalization far and wide, including, as President Obama has proposed, through trade adjustment assistance, through lifelong learning, through support for innovation and research; from helping every young person to get a higher education, and from reauthorizing crucial institutions such as the Export-Import Bank, which are helping local, small manufacturers like the Measurement Technology Northwest Inc. and Engineered Compost Systems expand their global footprint abroad. We also need to help hire new workers to fill the export orders that are coming from new markets overseas, including from countries in the Asia Pacific, as we know and as Pat just mentioned to you.
More of us also need to share the confidence that our parents and our grandparents had when they built this country out of the ashes of war – and frankly, the confidence that so many young entrepreneurs are exhibiting today. Remember, just three decades ago, experts were predicting that competition from the Japanese on their semiconductors – remember this? – computers and cars would cause America to become, and I quote, “a nation of short-order cooks and salespeople.”
Today, Japan’s automakers have set up plants that support jobs for tens of thousands of workers here in America. And despite all of the publicity about outsourcing, in the past five years, our manufacturing sector has been growing at twice the rate of the overall economy. Sometimes it really amazes me, folks, how short the public memory is. A lot of people forget that only six years ago, when President Obama first took office, right before he took office, we were on the brink of economic disaster. Iconic companies were filing for bankruptcy. Unemployment was approaching 10 percent. Our entire financial structure was on the brink of collapse. And when I say this, I am not exaggerating. I’m just repeating what a Republican secretary of the treasury said when he came to the Capitol Hill to implore my Senate colleagues and I to authorize a bailout of the system. And today, while nobody is claiming victory yet, the United States has added 12.3 million jobs over 62 straight months of private sector growth – the longest streak on record. We’ve put more people back to work than all of the other advanced economies combined. And a big cause of this turnaround is that our experts have reached a – our exports have reached a record level. They are up nearly 50 percent since 2009.
That tells a story. And it’s no accident, folks. That’s the result of the most determined, competitive, entrepreneurial business and talented workers in the world. It’s also the result of some smart policy – policy that is based on the idea that when we increase what America sells overseas, our payrolls get larger, our paychecks get fatter. On the average, export-supported jobs pay significantly more than other jobs. So we’re talking quality jobs, not just quantity. And if we were satisfied with this progress, well, perhaps we could just sit back and forget about new trade agreements and the chance to further pry open the international markets where 19 out of 20 of the world’s consumers live. Try that.
Happily, we’re not satisfied. Because we know that even if we attempt to stand still, nobody else will, or most won’t. And we’re going to get blown away economically in the process. We have to keep finding new markets. We have to keep creating those new jobs. And we’ve got to ensure that our workers – farmers, ranchers, businesses – receive equitable treatment in that marketplace. We can’t do that, folks, by sitting on the sidelines. You can’t be on the side of the road while other countries are writing the rules of the road for the rest of the world’s trade. We’ve got to be engaged. We’ve got to lead. And by the way, most Americans inherently understand that.
A recent poll shows that almost three out of five of our citizens view foreign trade as an opportunity, not a threat. And here’s the reason: The U.S. market is one of the most open in the world. Seventy percent of U.S. imports cross our borders tariff-free. You’ve all seen these duty-free stores at airports, right? Well, America is pretty much one big duty-free shop. That’s not the case with all – excuse me – with all of our partners. Our automakers face tariffs of up to 30 percent in Malaysia. Our poultry farmers face tariffs of up to 40 percent in Vietnam. Washington apples are charged a markup of 17 percent in Japan. And what about the great wine that you produce here in Columbia and the Walla Walla Valley? Tariffs on wine in Japan and Vietnam are as high as 50 percent. Not only that, America’s environmental and labor standards are among the highest in the world.
And that’s why we have so much to gain and nothing to lose by reaching deals that lower trade barriers, lower the tariffs, raise global norms – and we should also remember that if we don’t clinch free trade agreements in the Asia Pacific, it doesn’t mean that those agreements may not happen. It just means that we may not be part of them and we may not shape them. The standards will be driven down instead of up, and the business we might have had will go to our competitors instead. Even now, Washington apples are losing out to Chinese apples in Malaysia because Beijing has a preferential trade agreement with that country and we don’t. And Japan and Australia just signed a pact that will allow Australian beef into the Japanese market at a lower tariff than American beef. It just doesn’t make a lot of sense for us to sit here and watch. And I’m sure it doesn’t make a lot of sense to you.
It’s not just giant firms like Boeing, by the way, and Starbucks, and Costco, and Microsoft, and Amazon that we’re caring about here. Small and medium-sized businesses are really the linchpin of the American economy. In fact, they’re the source of two out of every three new jobs that we create in this country. But these firms also confront a unique set of challenges when they’re trying to increase exports. For example, the Cascade Design Company that is based in Seattle exports outdoor recreation equipment to some 40 countries. But it could sell far more if its customers didn’t have to pay high tariffs in exactly the markets that we will open through the TPP.
There’s a long list of examples like that; I’m not going to go through all of them. But the TPP will lower tariffs on American exports. It will ensure that TPP countries treat American products the same way that we treat products from their own firms. It will cut red tape. It will reduce bureaucracy for our small businesses and family farms. And it will help our companies participate more directly in new global supply chains that are creating unprecedented opportunities all around the world. When you add it all up, the economic case for trade promotion authority and for TPP is not even a close call in my judgment – it’s overwhelming. And as Secretary of State, let me put this in a perspective of global challenges.
It is no secret that the world in the future looks pretty complicated right now. The turbulence that we see comes from a combination of factors, including the fact that even as the world grows closer, there are powerful forces pulling people apart – terrorism, extreme nationalism, conflicts over resources, a huge number of people coming of age in parts of the world where there simply aren’t enough jobs. This creates a race between opportunity and frustration that we can’t afford to lose. Expanded trade can help us win that race by spurring innovation and – and as we’ve seen in Asia and elsewhere – helping hundreds of millions of people to lift themselves out of poverty. And poverty, my friends, is where you see much of this violent extremism born.
Just as important, trade agreements such as the TPP will help to knit America and our partners together so that we are better able to cooperate on other areas. It helps to create a community of common interests on trade that will reinforce trust and helps us expand our cooperation in other areas. And that matters, my friends, because the Asia Pacific is the single-most dynamic part of the globe today and where much of the history of this century is going to be written. It includes the four most populous countries, the three largest economies, and a huge and rapidly growing middle class that want to fly in the planes that you build here.
The good news is that our engagement in this region is welcome and making a difference because our partners know that our markets – and even our futures – are absolutely closely linked together. If we were to retreat from the Asia Pacific, and if our friends were in turn to turn their backs on us, we would face a much different world than we have known in recent decades. And it would not be a world that is more secure.
So let me be clear. We know that our goals in the Pacific are critical because we want what most countries in the region seek: a place where the sovereignty of every state is respected, whether they’re big or small; a region where disputes are settled openly and in accordance with rule of law. We – all of us frankly – can help make this happen if we’re as fully involved economically just as we are diplomatically. In fact, as my colleague Ash Carter, the Secretary of Defense, has suggested, the Trans-Pacific Partnership is as important to American interests in the Asia Pacific as our military posture. Completing the TPP would send a message throughout the region as well as the world that America is – and will continue to be – a leading force for prosperity and security in the Asia Pacific. That is good for the United States; it’s good for our trading partners; and it is definitely good for companies and workers here in the American Northwest.
So here’s the bottom line: 2015 is simply not the time for us to decide that trade negotiations are too hard, nor to – it’s not the time to vacate the field and ignore 70 years of lessons from the Great Depression and World War II. It’s not the time for us to sit back and allow the principles of free and open trade to be supplanted by the discredited and empty prospects of protectionism and mercantilism.
There is nothing progressive about blaming trade or trade agreements for the inevitable economic shifts that are brought on by technology and time. There is nothing liberal about clinging to the past when the future is filled with opportunities to innovate and create whole new industries. And there is nothing more in keeping with the traditions of Washington State – American traditions – than to look over the horizon for the connections that will create a stronger, more prosperous, and secure future for the people of this region and of all America.
My friends, more than 50 years ago, when Seattle hosted the World’s Fair, American exports were worth only about one-twentieth of their value today. In the decades since, our commercial relationships have been utterly transformed; our leading manufacturers have changed; our trade in service has exploded; and technology has made what was not even imaginable the new normal.
We are living in a wholly different world, an exciting time, except for one thing: the need for American leadership. Like the generation of Warren Magnuson and Henry “Scoop” Jackson, our generation faces a test that we cannot allow partisanship or any other source of internal division to prevent us from meeting. We have an opportunity before us to shape and elevate the global rules of trade for decades to come.
We cannot shy away from this task, just as we cannot walk backwards into the future. Like mariners; like sea hawks – with a small s (laughter); like the proud employees of Boeing; we need to face the world and all its challenges with the confidence in who we are, what we stand for, and our incredible ability to compete. That’s what we must do. And I am confident, as I look around this extraordinary manufacturing center, as I look at all of you, that the United States will get this done and Washington State is going to help us do it.
Thank you. (Applause.)
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